Alphabet Earnings Beat as Nasdaq Hits Record High

Following earnings released on Tuesday, 29 October, Alphabet (GOOG) stock saw a leap of more than 5% after hours, demonstrating investor optimism toward the growing cloud and AI segments of Google’s parent company. 

Tech sector confidence overall helped boost the Nasdaq to new highs, closing at 18,712 (29 October).

Alphabet Q3 Earnings Results

Alphabet Inc. announced Q3 2024 financial results that were well-received, exceeding Wall Street’s revenue and earnings expectations. 

Revenue grew 15% year-over-year to $88.3 billion, thanks in part to impressive gains made in Google Services and a 35% (AI-inspired) surge in Google Cloud revenue, which reached $11.4 billion. 

Alphabet’s net income positively surprised with a, 34% rise, leading to a 37% increase in EPS, reaching $2.12 per share, handily over the projected $1.84.

Investments in AI appear to have driven considerable growth in both Search and Cloud segments. Additionally, YouTube ad sales also saw a boost, fueled by U.S. election-related spending.

The tech firm’s Chief Executive touted the strong performance, saying: 

“The momentum across the company is extraordinary. Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off..” - Sundar Pichai, Alphabet CEO

Chart of GOOG (6 months)

Source: Plus500 platform

The after hours rise indicates shares of Alphabet are set to rise as Wall Street opens on Wednesday, 30 October, possibly setting up a breakout of resistance at the $170 price level. (Source: CNBC)

Nasdaq Hits Record High

The Nasdaq Composite reached a new record on Tuesday, climbing 0.8% as optimism built around upcoming tech earnings from major players. 

This wave of technology earnings is setting a positive tone and helped lift both the Nasdaq and S&P 500, the latter of which inched up by 0.2%, and is now only 0.5% shy of its own record high. In contrast, the Dow Jones Industrial Average fell slightly by 0.4% on 29 October.

Adding to the mix, Treasury yields remained high, with the 10-year yields spiking to a July of 4.34% intraday. This rise in yields reflects recalibrated market expectations regarding the Federal Reserve's approach to rate cuts, which investors are monitoring closely alongside key economic data releases such as the upcoming GDP figures due Wednesday 31 October.

Earnings Season: Tech Stocks in Focus

As investors awaited their post-market earnings, shares of Alphabet (GOOG) and Snap (SNAP) each inched up by 1%, with Advanced Micro Devices (AMD) popping 3% on 29 October ahead of its own report. 

Microsoft (MSFT) similarly saw a 1% increase, while Meta (META) advanced by 2%, both in anticipation of their financial releases on Wednesday. Meanwhile, Apple (AAPL), steady in its position, prepares to share results on Thursday.

Strong corporate earnings have become the theme of the season, with the S&P 500 set to achieve a net profit margin across the index of at least 12% - an achievement that, according to FactSet, marks the second consecutive quarter at this level.

Conclusion: Tech Earnings Optimism For Now

With Alphabet’s impressive earnings jump and robust growth in AI-driven services, investor optimism continues to drive tech stocks higher, fueling record highs in the Nasdaq. 

As the earnings season unfolds, all eyes remain on major tech players, whose results will shape both market sentiment and economic expectations alongside potential future actions from the Fed.