Alphabet Trading forecasts and signals

The British regulator has launched an investigation into the dominance of technology titans Amazon, Microsoft and Google in the field of cloud services. The watchdog will assess how well the market is performing and will also examine barriers to new entrants in the sector.According to Ofcom, Amazon Web Service (AWS), Microsoft Azure and Google, called "hyperscalers" because of the size of the data centers used to process and store data, share about 81 percent of revenue in the U.K. cloud market.The investigation, which will last up to 12 months, seeks to "ensure that digital communication markets work well for people and businesses in the U.K.," the regulator said in a statement. It will work closely with the Competition and Markets Authority (CMA) and intends to consult on interim findings and publish a final report within a year.If competition is found to be disturbed and that companies and consumers are affected, Ofcom can take enforcement action, recommend regulatory or policy changes to the government, or refer the matter to the CMA for further investigation.Ofcom also plans to launch a broader investigation into messaging services and devices for accessing audio-visual content, including WhatsApp, FaceTime and Zoom, to see how they affect traditional telecommunications services such as calls and messages.The use of cloud services has increased dramatically in recent years. In 2018, less than 10 percent of all global enterprise IT spending was on public cloud services, but that figure rose to 17 percent last year as more people worked from home due to the pandemic. According to Ofcom, some experts expect that amount to reach 45% of enterprise IT spending by ...

The Australian Antitrust Authority reported that the country's Federal Court ordered Google (a subsidiary of Alphabet Inc) to pay a fine of 60 million Australian dollars ($42.7 million) for misleading users when collecting their personal location data.The court found that Google misled some customers about personal location data collected using their Android mobile devices between January 2017 and December 2018.Google misled users into believing that setting up "location history" on their Android phones was the only way to collect location data, whereas the web and app activity monitoring feature also allowed collecting and storing this data.Google Type C shares on NASDAQ on August 11 fell by 0.69% to $119.82 per paper, and on the premarket on August 12, they are currently adding 0.73% to ...

The revenue of Alphabet, Google's parent company, increased by 13% YoY, to $69.7 billion. This value turned out to be almost at the level of the consensus forecast, which assumed revenue growth to $69.8 billion. Without the negative impact of exchange rates, the growth rate of the indicator would have been 16%. Alphabet's operating profit was $19.45 billion against the consensus forecast of $20.14 billion. The operating margin decreased from 31% to 28%, while investors expected a less severe decline – up to 29%. The decrease in marginality is explained by an increase in R&D and marketing expenses, mainly due to an increase in the number of employees and the wage fund. Over the past quarter, the company hired about 10 thousand specialists, and over the year the number of employees increased by 21%. Amid macroeconomic uncertainty, Alphabet plans to slow down the pace of hiring. The GAAP EPS indicator was $1.21, which was lower than the expected $1.27, including due to a loss on non-core activities.Advertising in the search engine, Google Maps and other services (Google Search & Other segment) brought the company $40.69 billion against the consensus forecast of $40.31 billion. The key segment pleasantly surprised investors. The results were better than Snap and Twitter, which presented weak quarterly reports last week. It should be noted that Alphabet receives some benefit from Apple's changed privacy policy, since advertisers can enjoy relatively higher efficiency of advertising campaigns in the Google search engine. The impact of macroeconomic factors was not so strong, so the worst fears of investors were not justified.As the management noted, the advertising segment on YouTube has felt the negative impact of a number of factors that are "difficult to disaggregate." In this quarter, the platform's advertising revenue growth was only 4.9% YoY, while it reached $7.34 billion, although the consensus forecast assumed revenue growth to $7.52 billion. The low rate of revenue growth is largely due to the effect of a high base – in the second quarter of 2021, advertising on YouTube jumped by 84% YoY, and now we see the normalization of the trend. We continue to positively assess the long-term potential of the segment due to the long-term trend of shifting budgets from traditional TV.The operating loss of the Google Cloud segment was higher than expected – $858 million against a projected loss of $788 million. Revenue increased by 35.6% YoY, to $6.28 billion, being $130 million below the consensus forecast. We suspect that not very strong results are caused by an aggressive pricing strategy compared to competitors, which is aimed at getting more contracts, but with low margins. The growth rate of the segment slowed down compared to the previous quarter (then an increase of 44% YoY was recorded), while the results were weaker than those of Microsoft's cloud segment, whose revenue grew by 46%. We believe that in the near future, the results of Google Cloud will not serve as a driver for the growth of the company's ...

The session on July 25, the main American stock exchanges ended in different directions. The S&P 500 rose 0.13% to 3,967 points. The Dow Jones gained 0.28% and the Nasdaq lost 0.43%. The energy sector took the lead in growth (+3.71%), while the sectors of cyclical consumer goods (-0.85%) and IT (-0.61%) were lagging behind.Company newsThe head of World Wrestling Entertainment (WWE: +8.5%) Vince McMahon has resigned.The stock quotes of Emergent BioSolutions (EBS: +6.2%) rose on the WHO statement on the global emergency situation due to the spread of monkey pox.The SEC is checking the Coinbase crypto exchange (COIN: -5.3%) on suspicion that it allowed US citizens to trade unregistered securities.We expectNY Times reported increased concern in the Biden administration about Beijing's statements and actions regarding Taiwan. There is an opinion that the PRC may try to encroach on the independence of this state in the next year and a half. Concerns have intensified over China's threats against Washington over the planned visit of House Speaker Nancy Pelosi to Taiwan. Analysts suggest that Beijing may go for a demonstrative military response, but will not provoke a larger conflict. At the same time, the refusal of the Speaker of Congress from the visit will be perceived by Beijing as a sign of US weakness. As for the economic consequences of these disagreements, first of all, the escalating conflict may put serious pressure on semiconductor manufacturers.Trading on July 26 on the sites of Southeast Asia ended in different directions. China's CSI 300 rose 0.79%, Hong Kong's Hang Seng gained 1.86%, and Japan's Nikkei 225 dropped 0.16%. EuroStoxx50 has been losing 0.2% since the start of trading.Brent crude futures are quoted at $102 per barrel. Gold is trading at $1,722 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3940-3990 points.MacrostatisticsToday, data will be presented on the consumer confidence index for July (forecast: 98 points against June 98.7) and on home sales in the primary market for June (forecast: 665 thousand after 696 thousand a month earlier).Sentiment IndexThe sentiment index rose 1 point to 35.Technical pictureThe S&P 500 has come out of the "bearish" corridor, but it is difficult to predict how long this rebound will last, since in the short term, the movement of the benchmark will be determined by macroeconomic, not technical factors. The MACD signals the continuation of movement in the local ascending channel, the RSI is in a comfortable zone.ReportsAlphabet (GOOGL) will present quarterly reports on July 26. According to forecasts, the corporation's revenue will grow by 13% YoY, to $69.9 billion. The indicators of the cloud computing segment (Google Cloud) will continue to increase most actively: revenue in this area may increase by 38% YoY. The focus will be on advertising revenue. We believe that Alphabet's results will be better than those of Snap and Twitter, which presented weak quarterly reports last week. It should be noted that Alphabet receives some benefit from Apple's changed privacy policy, since advertisers can enjoy relatively higher efficiency of advertising campaigns in the Google search engine and on the YouTube platform. Nevertheless, the balance of risks according to Alphabet's indicators is still shifted in an unfavorable direction due to the potential impact of high production costs on advertisers. The dynamics of the shares will be determined by the statements of the management at the conference call, the assessment of macroeconomic factors by the management of the corporation is especially ...