Alphabet's (GOOGL) Investments Are Paying Off - JPMorgan

JPMorgan analyst, Doug Anmuth, reiterated his Overweight rating on shares of Alphabet (NASDAQ: GOOGL) and established a price target of $1,440 after the company delivered strong top line results proving that its increased
investments are paying off. FXHN revenue increased an impressive 23.0% Y/Y, a 40 bps acceleration from 22.6% in 1Q & above our 22.0% estimate. Google Sites FXHN revenue modestly accelerated to 23.7% Y/Y, with mobile search once again the biggest contributor of dollar growth, followed by YouTube (#3 listed contributor in 1Q) and desktop search (#2 in 1Q). The analyst highlighted 3 key takeaways from the call:

1) Alphabet delivered strong top line results, again proving that its increased investments are paying off.

2) QTR to QTR margin variability likely remains as Alphabet continues to invest into major growth opportunities but operating income of $7.9B ex the Android fine was ahead of expectations, driven by strong revenue growth.

3) Investments in machine learning & AI are driving innovation throughout Alphabet’s businesses, including mobile search, cloud, Google Home, Assistant, Waymo, etc.

For an analyst ratings summary and ratings history on Alphabet click here. For more ratings news on Alphabet click here.

Shares of Alphabet closed at $1211.00 yesterday.

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