Alphabet Q4 earnings preview: What to expect?

After Alphabet crushed expectations in Q3 what can we expect in Q4 earnings and how might the share price respond.

Charts (4)

When

 
Tuesday 2nd February after the closing bell

Expectations

EPS $15.9 on revenue $53.09 billion

What to watch

The last we heard from Google parent Alphabet in Q3 earnings the tech giant beat analysts’ expectations by a wide margin. Total revenue and profits surged thanks mainly to increased advertising revenue but also down to cloud revenue beating forecasts. Youtube figures were also impressive rising 32% to $5 billion. 

Google’s cloud business has grownh quickly across the pandemic supported by the WFH dynamic. The cloud business is expected to be a significant revenue driver over the coming years and we are expecting to see a break out of the cloud business numbers this quarter for more transparency. Expectations are for healthy growth but at a slower pace in Q4.

Advertising continue to be a key focus. Google has a more diversified advertiser base than some peers so whilst it saw a larger deceleration of advertising growth in Q2, Google could well benefit more when exposure to travel & local activity picks up as the vaccine drive picks up. 

Alphabet technical analysis

Alphabet trades above its upward sloping 50 & 100 sma on the daily chart. It also trades above an ascending trendline which dates back to late October revealing an established bull trend. 

The RSI is also supportive of further gains as it is points northwards in bullish territory but below the key 70 overbought level.

After briefly piercing 1900 in Monday’s trades, the share price was unable to maintain this level and closed +3.6% at 1893. Whilst the chart paints a bullish picture, the price needs to clear the 1915 yesterday’s high before retesting 1932 its all time high and bring 2000 the psychological level into focus.

Failure to hold the higher ground could see Alphabet share price test 1800 horizontal support prior to 1775 the confluence of the ascending trendline and 50 sma. A break through here could bring 1700 into focus, with a move below this level negating the current uptrend.

Learn more about trading equities

Read more about the outlook for tech stocks in 2021 here


More from Google

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.