YouTube Wrecks Google's Profit

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YouTube Wrecks Google's Profit

Shares of Google’s parent company Alphabet (Nasdaq: GOOGL) dropped 2.55% in after-hours trading on Tuesday after posting negative earnings results.

Financials: Alphabet reported earnings per share of $24.62 and revenue of $68.01 billion; both were below estimates.

YouTube Miss: The results were especially disappointing for YouTube. Revenue for YouTube hit $6.87 billion in the quarter, which was below estimates. The video streaming platform’s growth really took off during the pandemic, but now has subsided. There was also a decrease in video ad spending from businesses due to the war in Europe, according to the company.

In The Cloud: Google Cloud was a bright spot for the company, with revenue hitting $5.82 billion. This was better than expected.

Good Bets: Revenue for Other Bets, a segment that includes the company’s self-driving car business, doubled year-over-year in the quarter.

Buyback: The company also authorized a $70 billion stock repurchase program to increase the stock price.

Final Thoughts: While there’s a lot to like about the company, including its 20-for-1 stock split, there are concerns. This YouTube miss could get worse for the company, and it could be a sign that other social media platforms are also at risk.

Notables

Notable Earnings Today: Meta Platforms (Nasdaq: FB), Boeing (NYSE: BA), Spotify Technology (NYSE: SPOT), PayPal Holdings (Nasdaq: PYPL), Cenovus Energy (NYSE; CVE), Ford (NYSE: F), T-Mobile US (Nasdaq: TMUS), Qualcomm (Nasdaq: QCOM), Oshkosh (NYSE: OSK), Pinterest (NYSE: PINS), Teck Resources (NYSE: TECK), Teladoc Health (NYSE: TDOC), Humana (NYSE: HUM), ServiceNow (NYSE: NOW), Harley-Davidson (NYSE: HOG), Las Vegas Sands (NYSE: LVS), American Tower REIT (NYSE: AMT), Hertz Global Holdings (Nasdaq: HTZ), Automatic Data Processing (Nasdaq: ADP), O'Reilly Automotive (Nasdaq: ORLY), AFLAC (NYSE: AFL), Align Technology (Nasdaq: ALGN), American Water Works (NYSE: AWK), Amgen (Nasdaq: AMGN), Annaly Capital Management (NYSE: NLY), Avalonbay Communities (NYSE: AVB), Avient (NYSE: AVNT), BioMarin Pharmaceutical (Nasdaq: BMRN), Boston Scientific (NYSE: BSX), Bunge (NYSE: BG), C.H. Robinson Worldwide (Nasdaq: CHRW), Canadian Pacific Railway (NYSE: CP), Check Point Software Technologies (Nasdaq: CHKP), Cheesecake Factory (Nasdaq: CAKE), CME Group (Nasdaq: CME), Core Laboratories (NYSE: CLB), Coursera (NYSE: COUR), Credit Suisse Group (NYSE CS), Discover Financial Services (NYSE: DFS), Encompass Health (NYSE: EHC), Entergy (NYSE: ETR), EQT (NYSE: EQT), Equinix (Nasdaq: EQIX), Fiserv (Nasdaq: FISV), Garmin (NYSE: GRMN), General Dynamics (NYSE: GD), GlaxoSmithKline (NYSE: GSK), Hess (NYSE: HES), Hess Midstream (NYSE: HESM), Hologic (Nasdaq: HOLX), IQVIA Holdings (NYSE: IQV), Kraft Heinz (Nasdaq: KHC), LendingClub (NYSE: LC), M/I Homes (NYSE: MHO), Mattel (Nasdaq: MAT), Meritage Homes (NYSE: MTH), Molina Healthcare (NYSE: MOH), Norfolk Southern (NYSE: NSC), O'Reilly Automotive (Nasdaq: ORLY), Old Dominion Freight Line (Nasdaq: ODFL), Oshkosh (NYSE: OSK), Owens Corning (NYSE: OC), Pilgrim's Pride (Nasdaq: PPC), Raymond James Financial (NYSE: RJF), Ryder System (NYSE: R), Seagate Technology (Nasdaq: STX), STMicroelectronics (NYSE: STM), TE Connectivity (NYSE: TEL), United Rentals (NYSE: URI), Upwork (Nasdaq: UPWK), Vale (NYSE: VALE), Yamana Gold (NYSE: AUY).

Notable IPOs Today: SaverOne 2014 Ltd. American Depositary Shares (Nasdaq: SVRE), Innovative Eyewear Inc (Nasdaq: LUCY), Tenon Medical, Inc. (Nasdaq: TNON).

Notable Equity Crowdfunding Campaigns Ending Today: AgTechLogic (StartEngine), Whimsy (StartEngine), FLX Bike (StartEngine), Beanstox (StartEngine).

Notable Economic Events Today: Goods Trade Balance (8:30 a.m. ET), Retail Inventories (8:30 a.m. ET), Pending Home Sales (10:00 a.m. ET), Crude Oil Inventories (10:00 a.m. ET).

Robinhood Slips Due to Layoffs

Photo by PiggyBank / Unsplash

Shares of Robinhood (Nasdaq: HOOD) dropped 2.20% in after-hours trading on Tuesday after the financial services company announced that it will lay off 9% of its workforce.

Details: In a blog post on Tuesday, CEO Vlad Tenev wrote that the company "went through a period of hypergrowth accelerated by several factors including pandemic lockdowns" that resulted in growing the company’s headcount to meet customer demands. Now, Tenev said that this headcount growth "has led to some duplicate roles and job functions."

Final Thoughts: Shares of Robinhood are down 71% since its IPO last year. It’s another pandemic darling that has crashed back down to Earth.

2022 Developments With Chia

After emerging on the scene last year, what are some recent developments with the cryptocurrency Chia and the network behind it?

P2P: In January, Chia launched a peer-to-peer system for its wallet holders. It’s one of the few crypto networks to offer such a service for its users.

Final Thoughts: Chia, which has a brand of being more environmentally friendly than other cryptos, recently welcomed a new vice president who is focused on climate finance and sustainability.

Trends to Watch

Acceptance: Fidelity to Allow Retirement Savers to Put Bitcoin in 401(k) Accounts (The Wall Street Journal)

Toy to the World: Private equity firms discuss potential buyout of toy maker Mattel (Financial Times)

Car Problems: General Motors profit dips in the first quarter amid rising costs and supply chain issues (CNBC)

You Break It, You Buy It: Elon Musk’s Twitter deal includes a $1 billion termination fee on both sides (TechCrunch)

Big Win: Microsoft Stock Rallies on Strong Earnings and Outlook (Barron’s)

YouTube Wrecks Google's Profit