Alphabet Q4 results highlight long-term growth opportunities, Truist says
Sean Gallup/Getty Images News

Alphabet (GOOG, GOOGL) posted better-than-expected fourth-quarter results last night that investment firm Truist showed why it is considered "one of the best [long-term] growth compounders" in the space.
Analyst Youssef Squali, who reiterated his buy rating and $3,600 price target, added that the 20-for-1 stock split and aggressive buy back are "positive near-term catalysts," but the actual results highlighted just how strong the company's operations are.
"[Alphabet] displayed a level of resilience to macro headwinds no other digital ad platform is likely to show this earnings season in our view, with gross rev growth of 33% [year-over-year] FXN, confirming its preeminent position as the engine of the global digital economy," Squali wrote in a note to clients.
In addition to strong advertising results, Squali noted Google Cloud benefited from changing business habits and with margins near a multi-year high, advancements in artificial intelligence and machine learning driving product innovation in search and YouTube should "sustain the momentum."
Alphabet (GOOG, GOOGL) shares were up nearly 11% to $3,060 in pre-market trading on Wednesday.
Going into 2022, Squali noted that Alphabet management said it would "significantly increase" spending this year, after "muted" growth in 2020 and 2021, amid the pandemic.
"The company's investment plans span across the entire business to fuel growth, including Google Cloud (servers and data centers), its Search business, and office facilities - the latter of which Alphabet has already purchased $1B in office space in London and announced a new New York office buildout in 3Q," Squali explained.
"Interestingly, GOOGL has honed in on AI and ML investments and capabilities aimed at helping users and advertisers alike. The company's outlook in FY22 is shaping up to be a more significant year of investments and expenditures (vs. 2021) to fuel growth, in our view, as Google feels there is a significant growth opportunity across its businesses ahead." 
The analyst also noted that Alphabet and specifically, Google, is the "safest port" in the wake of Apple's (NASDAQ:AAPL) Identifier for Advertisers storm that has hurt other advertising-based companies, including Meta Platforms (NASDAQ:FB) and Snap (NYSE:SNAP).
"While management did not explicitly call out impacts from the recent iOS changes, we believe GOOGL is a relative winner in this environment," Squali continued. "As paid search tends to be a high consumer intent advertising channel, making targeting relatively less important than in paid social. Thus, we believe both brand and DR advertisers will continue to spend heavily on Google in this environment, as other digital advertising platforms navigate the IDFA changes."
On the earnings call, Alphabet (GOOG, GOOGL) Chief Executive Sundar Pichai highlighted artificial intelligence and advertising as priorities for 2022, adding that it âlaunched multiple new features for "the businesses that are the backbone of our global community."