Alphabet, Meta Post Earnings Amidst AI Competition and Regulatory Uncertainties
Earnings Release:
Alphabet (GOOG): Q4 results expected after market close on Tuesday.
Meta Platforms (META): Reported earnings last week, surpassing estimates.
Key Focus Areas:
* AI Competition: DeepSeek's AI models pose a threat to Alphabet's dominance.
* Revenue Streams: Alphabet seeks to monetize AI investments.
* Digital Ad Market: Performance of the industry amidst competition and regulatory scrutiny.
Financial Projections:
Alphabet:
* Earnings per share: $2.13
* Revenue: $96.6 billion
Meta:
* Earnings per share surpassed expectations
* Declined to provide full-year guidance
Cloud Growth:
Alphabet:
* Cloud revenue expected to reach $12.1 billion
* Faces competition from Amazon and Microsoft
Microsoft:
* Cloud revenue grew 21% year-over-year, but fell short of estimates
Regulatory Risks:
Google (Alphabet):
* Appeal against court ruling alleging monopoly power abuse
* Breakup potentially a remedy being considered
Political and Market Sentiment:
* CEO Sundar Pichai's presence at Trump's inauguration suggests industry reset
* Investors monitoring potential impact of Trump's policies
Company Performance:
* Alphabet shares up 41% in 12 months
* Amazon shares up 39% in 12 months
* Microsoft shares up only 2% in 12 months