NFLX - YouTube And Google Cloud Promise To Power Continued Share Gains For Alphabet

2024-06-28 04:43:03 ET

Summary

• YouTube and Google Cloud are poised to deliver strong EPS growth for Alphabet in coming years.
• YouTube Premium could grow YouTube's revenue to $25 billion per quarter by 2027, and low incremental costs with that offering should improve the Services margin mix materially.
• Cloud is only starting to contribute to the bottom line, and with strong product adoption, we expect YoY growth to remain robust for the foreseeable future.
• Despite this outlook, GOOG shares are reasonably priced, and the company is the cheapest big tech name out there.
• We re-iterate our 'Buy' rating on the stock.

Back in November, we published an article on Alphabet ( GOOG , GOOGL ) titled: "Google, Likely The Main Beneficiary Of OpenAI Tumult".

The article talked at length about the Sam Altman firing controversy at OpenAI which we thought was a positive for GOOG, and we also touched on our thought process around Alphabet's long-term strengths in the AI arena....

For further details see: