Mark Mahaney, Evercore ISI senior managing director and head of internet research, joins Catalysts to break down what investors can expect from Alphabet’s (GOOG, GOOGL) earnings.
Mahaney believes that the top factor in Alphabet’s results “starts with search and it probably ends with search.” He will be closely watching whether the company can maintain double-digit search revenue growth and stresses the importance of guidance. After search, he says that the second area to watch in Alphabet earnings is YouTube, as it experienced some softness during the second quarter.
The third area is Google Cloud, which Mahaney explains is because there is a “broad expectation in the market that the cloud companies will be able to print accelerating revenue growth in the back half of this year because industry cloud demand is accelerating.”
As Google seeks to “infuse” AI into all of its offerings, Mahaney believes that the company’s investments will lead to a higher return on ad spend as the technology helps advertisers run better campaigns.
He tells Yahoo Finance, “I actually think Google’s done a decent job with AI… I think they got caught a little bit flat-footed by OpenAI, but my guess is that they have the ability to easily catch up to where OpenAI is.”
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This post was written by Melanie Riehl