Alphabet rises as analysts praise search, cloud results amid a 'wall of worry'
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Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) shares rose on Wednesday as the tech giant posted second-quarter results that missed estimates, but search and cloud continued to show strength amid a "wall of worry" about the broader economy. 
Evercore ISI analyst Mark Mahaney, who has an outperform rating on Alphabet (GOOG) (GOOGL), noted that the company's fundamentals are holding up better than expected. 
Mahaney, who lowered his price target to $140 from $155.50, noted that ad revenue grew roughly 5% sequentially in constant currency, compared to 7% growth in the second quarter of 2019. However, this came on a revenue basis of 80% higher than two years ago, something the analyst deemed "impressive."
"Investments and innovations that the company has made around its core Ads business are paying off, with its somewhat recently launched Performance Max campaigns a recent example," Mahaney wrote, adding that the stock is "highly attractive" at 16 times earnings. Alphabet (GOOG) (GOOGL) shares rose slightly more than 3% in premarket trading. Other advertising-related stocks also rose on back of the results, including Meta Platforms (META), Snap (SNAP) and Pinterest (PINS).
Truist analyst Youssef Squali noted that Alphabet (GOOG) (GOOGL) showed "strong resiliency" in the quarter, and while results were seen as "virtually in line" and there was some weakness in YouTube, it looks as if the stock can start to rise again.
"We believe that Street expectations are getting to be more reasonable and achievable, paving the way for the stock to start working again," Squali wrote in a note to clients, adding that the firm expects search and cloud to remain "relatively resilient" with 7% and 33% growth in the second-half of the year, even with the possibility of a recession ahead. 
While Alphabet (GOOG) (GOOGL) does not provide formal guidance, Stifel analyst Scott Devitt noted that the qualitative commentary was helpful. In the third-quarter, Google Services will surpass tough year-over-year comparisons and while the pullback in advertising spending will be a factor through the rest of the year and foreign exchange headwinds have gotten harder, the company is going to slow the pace of hiring.
"We are trimming near-term estimates to reflect management's commentary and revised growth trajectories implied by [second-quarter] results, though we are encouraged by the durability of the core business despite near-term headwinds," Devitt wrote, while lowering the firm's price target on Alphabet (GOOG) (GOOGL) to $145 from $150.
On Tuesday, a top analyst said that there may be more pain to come for devices powered by Google's (GOOG) (GOOGL) Android operating system.