Google's Q4 2024 earnings dip is not a significant concern for investors. Here's why:
- Revenue Growth: Google's revenue grew by 11.77% year-over-year to $96.47 billion1. This indicates a strong overall performance, despite a dip in earnings per share (EPS).
GOOGL Total Revenue YoY, Total Revenue
- Earnings Per Share (EPS) Growth: While the EPS decreased to $2.152, the growth rate for EPS was 31.1%3, which suggests that the company's profitability is still increasing, even if the EPS amount decreased.
GOOGL Diluted EPS YoY, Diluted EPS
- Business Segment Performance: Google's business segments, including YouTube Advertising, have shown strong performance4. YouTube Advertising revenue grew by 10% year-over-year5, and Google Cloud revenue rose by 35%6.
GOOGL Revenue By Business
- Investment in Innovation: Google's commitment to innovation, particularly in AI, is paying off5. The company's AI products are boosting its cloud business and digital advertising, which are critical components of its revenue growth.
- Market Position and Future Prospects: Google's leading position in search and advertising, combined with its AI capabilities, positions it well for future growth7. The company's robust long-term prospects and diversified capabilities across AI, Cloud, advertising, and autonomous driving make it an attractive investment6.
- Stock Performance and Analyst Confidence: Despite the earnings dip, Google's stock has increased by 20% in 2024 and more than 150% in the past five years5. Analysts maintain a positive outlook, with a "Buy" rating and a belief in Google's undervaluation compared to its peers6.
In conclusion, while a dip in EPS can be concerning, the context of Google's strong revenue growth, particularly in its core business segments, and its strategic investments in innovation suggest that this dip is not a major concern for investors. The company's continued growth in revenue and profitability, along with its leading market position, supports a positive long-term view.
3/27/2025 08:20am
