Stockchartoftheday -bJanuary 31st 2024 – Alphabet Inc., Drops 7.5 Percent on Earnings

Today Alphabet dropped 7.5 percent, its 3rd largest point drop in a day over the past 10 years? The reason being is Google on earnings stated that it would be spending more on developing AI as this is the big growth segment in technology right now. 

If we look at the Alphabet chart we can have a huge rally from its fall lows (like most of the so-called magnificent 7 did) rising from just over $90 a share to $150. All and all google was up nearly 58 percent in 2023. 

Alphabet’s Q4 earnings jumped 56% to $1.64 a share under generally accepted accounting  principles, also known as GAAP. Gross revenue rose 13% to $86.31 billion.

Alphabet’s Q4 advertising revenue rose 11% to $65.52 billion, just below estimates of $65.82 billion.

Wall Street analysts polled by Factset now estimate Alphabet’s 2024 capital spending at $40 billion, up 25% from last year. Some estimates are higher. This represents the increase due to AI spending. 

Finally, we can see that Alphabet had a similar gap down last quarter. However, the stock bottomed just above the 200 day moving average and moved higher in the 4th quarter. Will it happen again? Only time will tell.