According to the company’s earnings report, second-quarter profit of Google –Alphabet Inc (NASDAQ:GOOGL)– blew up estimates. The internet giant amassed $18.5 billion, a growth of 166% compared to the $6.9 billion in the same period last year.
The firm’s revenue reached $61.88 billion, up 62% from Q2 2020, overdoing analysts’ forecast of about $56 billion. Earnings per share topped $27.26 against a $19.3 estimate, sending Google’s stock up by 3% after the earnings disclosure.
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Around 80% of Google’s record-breaking success in the second quarter is mainly rooted in the whopping advertising revenue of $50.4 billion, which represents a 70% increase from last year, as informed by CNBC.
Likewise, the company strongly boosted its cloud computing services, Google Cloud, which closed the second quarter with a revenue of $4.6 billion, reporting a 54% increase. Like Microsoft Corporation (NASDAQ:MSFT) and Amazon Inc (NASDAQ:AMZN), Google is capitalizing on the accelerated digitization caused by the pandemic.
YouTube’s revenue was also a key element in the company’s success, as its advertising sales rose to $7 billion in the second quarter –up 83.7% from last year– edging the platform closer to Netflix Inc (NASDAQ:NFLX)’s $7.34 billion.
Between January and June, Google also announced profits of $36.4 billion, more than two times from the same period last year, out of an income of $117 billion –which accounts for a 47% increase.
Big Tech’s Rising Power
Sundar Pichai, CEO of Google and Alphabet, was quoted as saying in the Wall Street Journal: “In Q2, there was a rising tide of online activity in many parts of the world, and we’re proud that our services helped so many consumers and businesses.”
Financial chief Ruth Porat also said, “Our strong second-quarter revenues of $61.9 billion reflect elevated consumer online activity and broad-based strength in advertiser spend. Again, we benefited from excellent execution across the board by our teams.”
There is no doubt that the rise of electronic commerce and digital services due to the pandemic is further strengthening the leadership of the Big Tech firms.
In the second quarter, however, Apple was the one with the highest profit with $21.7 billion, followed by Google –$18.5 billion– Microsoft with $16.5 billion, and Facebook with $10.4 billion. Together they achieved $67 million.
Google, Facebook, and Netflix are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.