Vladimir Zernov
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Alphabet Video 28.04.21.

Alphabet Reported Strong Q1 2021 Results

Shares of Google’s parent company Alphabet gained strong upside momentum after the company released its first-quarter results. Alphabet reported revenue of $55.3 billion and earnings of $26.29 per share, beating analyst estimates on both earnings and revenue.

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The company stated that strong revenues reflected “elevated consumer activity online and broad based growth in advertiser revenue”. Alphabet also noted that Google Cloud was growing at a robust pace and recorded revenues of $4 billion. It should be noted that all segments showed strong growth.

The company has also announced that its Board of Directors authorized a share buyback of up to $50 billion. This announcement served as an additional bullish catalyst for Alphabet shares.


What’s Next For Alphabet?

Alphabet has clearly benefited from trends that were accelerated by coronavirus pandemic, and its first-quarter results reflect its strong position.

Alphabet managed to grow its revenue by 34% on a year-over-year basis, which is remarkable for a company of its size. Importantly, all segments showed growth, although Google Search remained the key contributor to the company’s performance.

It remains to be seen whether Alphabet will continue to grow at a fast pace at a time when people around the world are expected to move closer to their normal lives thanks to mass vaccination programs. Analysts expect that the company will report earnings of $81.92 per share in 2022, so the stock is trading at a forward P/E of less than 30 which looks reasonable for a company with dominant market position and strong growth.

At this point, the main risks for Alphabet lie in the regulatory area. Lawmakers from various countries have expressed their concerns about the dominance and enormous power of Big Tech companies, and regulatory pressure is expected to increase over the upcoming years. However, the market should easily shrug off any worries about increased regulation if Alphabet shows steady growth.

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