Tech giant stock under pressure: Alphabet Inc Class A (NASDAQ: GOOGL)

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Alphabet Inc Class A (NASDAQ: GOOGL) stock fell over 2% on 29th October, 2019 (as of 12:22 pm GMT-4; Source: Google finance) after the company posted mixed results for the third quarter of FY 19. The company has delivered the advertising revenue of $33.92 billion in the third quarter 2019 compared to $28.95 billion in Q3 of last year. GOOGL’s Capital expenditures has risen from $5.28 billion in the year-ago quarter to $6.73 billion on the back of company’s expansion in Silicon Valley and other areas.

Meanwhile, during the quarter, the company intends to triple the sales force in cloud, and consider it to be a key growth driver for Alphabet, revealing that it pulls in $8 billion annually. The company has already hired more than a dozen top tier executives from competing cloud companies since he took the reins earlier this year. Google Cloud currently stands in a distant third as it competes against stronger cloud market leaders Amazon and Microsoft.

GOOGL in the third quarter of FY 19 has reported the adjusted earnings per share of $10.12, missing the analysts’ estimates for the adjusted earnings per share of $12.42, according to Refinitiv consensus estimates . The company had reported the adjusted revenue growth of 35.9 percent to $40.5 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue of $40.32 billion. The company’s Traffic acquisition costs for the quarter is $7.49 billion compared to $7.48 billion, according to FactSet. Paid clicks on Google properties from Q3 2018 to Q3 2019 was 18% and Cost-per-click on Google properties from Q3 2018 to Q3 2019 -2%. GOOGL’s “other revenue,” which includes hardware like its Pixel phones and cloud products, came in at $6.43 billion, which has surpassed the expectations of $6.32 billion, according to Factset. The company had earned $6.18 billion last quarter and $4.64 billion in last year’s Q3. The revenue from “other bets,” which includes its subsidiaries outside of Google like the self-driving car company Waymo, came in at $155 million, which was more than last year’s Q3 $146 million in the year-ago quarter. The company has lost $941 million during the quarter, up from a loss of $727 million a year ago.

On the other hand, the company has a number of external and internal issues. U.S. and foreign antitrust regulators are scrutinizing the company. The U.S. Department of Justice had announced last quarter that it is opening a broad antitrust review of big tech companies including Google, and the DOJ launched a separate antitrust probe into Google. Politicians and presidential candidates have also increased the scrutiny.

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