Sundar Pichai, CEO of Google and Alphabet, speaks about artificial intelligence during the Bruegel think tank conference in Brussels, Belgium, on January 20, 2020.
Yves Herman | Reuters
Alphabet will report first-quarter earnings after the bell on Thursday.
Here's what analysts are expecting.
- Earnings per share: 1.51 USD, according to LSEG.
- Revenue: 78.59 billion USD, according to LSEG.
- YouTube advertising revenue: 7.72 billion USD, according to StreetAccount.
- Google Cloud revenue: 9.35 billion USD, according to StreetAccount.
- Traffic Acquisition Cost (TAC): 12.74 billion USD, according to StreetAccount.
Wall Street is expecting Alphabet to report a second straight quarter of year-over-year revenue growth in the mid-teens. While that marks an acceleration from the past few quarters, the numbers still compare with some of Google's weakest reports on record.
The artificial intelligence boom has forced Google to reckon with changing consumer behavior in terms of how they access information online, and forced the company to ensure that it doesn't fall behind OpenAI and Microsoft in developing new technology and features.
Google has been reorganizing to try to stay ahead in the AI arms race as more users move away from traditional internet search.
In February, Google introduced its AI image generator, this tool towing company after users discovered it inaccuracy has spread online. The incident follows several other product launch missteps as part of Google's efforts to bring tools and services to market.
Prabhakar Raghavan, senior vice president of search at Google, told employees last month that the need to invest quickly in AI has changed the market and they need to move faster.
“We are in a new cost reality,” Raghavan said at an all-hands meeting. get by CNBC. With innovative AI, the company is “spending more on machines,” he added. Organic growth is slowing down and the number of new devices appearing in the world “is not what it used to be”.
The first quarter of the year has included “really high highs and low lows,” said Raghavan, who heads a research group. re-organize of the search unit, bringing in firm veteran Liz Reid as head of the search department, reporting to him.
Online advertising competitors Meta reported first quarter results on Wednesday. While revenue and profit beat estimates, shares fell in extended trading on weaker-than-expected forecasts and CEOs. by Mark Zuckerberg commit to continuously invest a large amount, focusing mainly on AI.
Google added more general AI features for search during the quarter and launched Circles for Search, which uses words or images highlighted from screenshots and turns them into Google searches . Gizmodo called it “best new Android feature in years.”
Cost cuts and layoffs also continued during the quarter. Google CFO Ruth Porat told the company's finance team that it would see restructuringThat includes relocations to other countries and job cuts, CNBC reported.
The latest downsizing comes after Google's broader effort to realign its workforce and resources to accommodate further investment in new technologies like AI as growth accelerates. slow advertising. CEO Sundar Pichai tell the staff in January that there could be more job cuts in 2024, although he did not specify at the time which teams would be affected.
Google also faced internal strife during the quarter as employees became vocal protest The company's cloud contract with the Israeli government is called Project Nimbus. The company has ended shoot more more than 30 employees they claimed had ties to the internal protests.
