Alphabet's digital ad gains don't extend to rivals on Wall Street
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Alphabet (NASDAQ:GOOG) shares surged almost 8%, Wednesday, as the Internet giant said strong Google advertising sales were key to the company's upbeat fourth-quarter results.
However, other notable companies that count digital advertising as a main source of revenue failed to benefit from Google's (GOOG) take on the digital ad market, suggesting that such gains could be limited to Google (GOOG) just because of its sheer size and scope.
On Tuesday, Google (GOOG) reported fourth-quarter earnings and sales that topped Wall Street's expectations. The results were led by Google's (GOOG) advertising business, which turned in sales of $61.2 billion. MKM Partners analyst Rohit Kulharni said that Google's (GOOG) "robust advertising revenue growth implies the overall demand environment has stayed healthy amidst volatile supply chain [and other] uncertainties." Kulkarni has a buy rating and $3,375-a-share target price on Alphabet's (GOOG) stock.
Truist Securities analyst Youssef Squali went even further, as he raised his price target on Alphabet's (GOOG) stock to $3,600 a share from $3,400, and left his buy rating unchanged. Squali said that Google (GOOG) "displayed a level of resilience to macro headwinds no other digital ad platform is likely to show this earnings season."
However, Google's (GOOG) gains didn't excite investors in other companies that rely on digital ads for much of their revenue.
Snap (NYSE:SNAP) shares gave up more than 3%, while Pinterest (NYSE:PINS) shares fell more than 6% as trading progressed. Both companies are scheduled to report quarterly results after the close of trading on Thursday.
Meanwhile, Facebook parent Meta Platforms (NASDAQ:FB), edged up by just 0.5% ahead of its fourth-quarter report set for after Wednesday's market close.