Alphabet Inc (NASDAQ:GOOGL) Shares Could Reach $1000-Club

Following the earnings report, Google's share price fell by almost 3.5 percent in after market hours.

Analysts hoped for earnings of $9.67 per share on $25.22 billion in revenue from Alphabet, but after markets closed the company reported earnings of $9.36 per share on $26.06 billion in revenues during its fourth quarter that ended December 31.

Google segment revenues for the quarter were $25.80 billion and were up 22% over the prior year.

Along with the continued strength of YouTube, Alphabet on Thursday credited mobile search with driving fourth-quarter revenue.

At the same time, Cantor Fitzgerald analyst Youssef Squali said Alphabet delivered another strong quarter, reflecting solid advertiser demand for the company's mobile search, Youtube and programmatic products.

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During the call, Google CEO Sundar Pichai touched a lot on Google's main new areas of investment like hardware, cloud services, and YouTube. While aggregate paid clicks were up 36% year-over-year, cost per click was down 15%, which also provided a hit to revenue. Furthermore, video ads also witnessed a decline in RPM due to the rapid growth of YouTube, where a majority choose to use TrueView ads and the contribution from buying on DoubleClick Bid Manager, which monetizes at lower rates than ad clicks on Revenue came in at $26 billion powered by strength in sales of its cloud offerings, like Azure, which almost doubled. They're Googling everything on their phones, and that remains both a challenge and an opportunity for Google the company. Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, said the lack of details surrounding sales of Pixel and Google Home in the latest earnings report is disappointing. Analysts tried unsuccessfully to get the company to give more details about that. Revenue in the division rose 82% versus a year ago, although it had an operating loss of $3.6 billion. The reorganization into a holding company split the company's core search business from a growing list of fledgling operations, like the newly minted Waymo - what used to be Google's self-driving vehicle project until it was spun off as an independent Alphabet company in 2016. Regulators in Europe and beyond are keeping close watch on Google's growing power and could move to curb it.

The strongest progress was seen in Alphabet's "Other Bets" division, which saw a hefty jump in revenue from $150 million in the same quarter last year to $262 million this year.

Meanwhile, Lloyd Walmsley of Deutsche Bank came away upbeat from Alphabet's earnings, citing solid two-year growth trends in Google sites revenue.

That said, its Other Bets properties are still operating under a loss; it lost over a billion dollars this part quarter. Losses for Other Bets have been shrinking, too.