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Artificial Intelligence is rapidly transforming industries worldwide, driving a global revolution across sectors. Investors looking to benefit from this growth can consider adding fundamentally strong AI stocks Microsoft (MSFT), NVIDIA (NVDA), and Alphabet (GOOGL) to their portfolios to capture the potential gains. Read on…The Artificial Intelligence (AI) revolution is reshaping industries and economies at an unprecedented pace, driving remarkable growth and transformation across the globe. With its branches spreading to various industries around the world, an incoming industrial revolution caused by the effective nature of AI would be an educated guess.
Considering this backdrop, it could be a wise move for investors to add shares of Microsoft Corporation (MSFT), NVIDIA Corporation (NVDA), and Alphabet Inc. (GOOGL) to their portfolio to ride on the wave of the incoming industrial revolution.
Artificial Intelligence is at the forefront of the Fourth Industrial Revolution, a term coined by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, in his 2016 book, The Fourth Industrial Revolution.
Emerging technologies such as AI, the Internet of Things (IoT), and robotics are converging with the physical, digital, and biological realms. This convergence is profoundly reshaping economies, industries, and societies, driving a new era of innovation and transformation.
The potential of AI is unmatchable, with the technology creeping its way into several sectors. These innovations around AI are still in full swing, with tech giants pouring billions into the technology and nations hoarding the chips required for future AI ambitions.
Statista projects the AI market size to hit $184 billion by 2024, with the United States leading globally at $50.16 billion. On another note, a recent study by PwC estimates that AI could boost the global economy by a staggering $15.7 trillion by 2030, equating to the combined economic output of China and India.
The boom in AI has also led to President Biden issuing a landmark Executive Order to strengthen AI safety and security and encourages recognizing AI’s enormous promise, and deepening the United States’ position in AI innovation. The order directed increased investment in AI innovation and new efforts to attract and train workers with AI expertise.
Given the favorable market position AI is currently in, let us discuss the fundamentals of three AI stocks that are leading forth the industrial revolution, starting with #3.
Stock #3: Microsoft Corporation (MSFT)
MSFT is a tech giant that innovates in software, services, and devices. Its divisions include Productivity & Business Processes; Intelligent Cloud; and More Personal Computing. The company’s flagship offerings include Office, Microsoft Teams, and advanced solutions like Microsoft Viva.
On August 8, MSFT announced a partnership with Palantir Technologies Inc. (PLTR), known for its role in counterterrorism software. Together, the companies plan on integrating cutting-edge cloud, AI, and analytics into the U.S. Defense and Intelligence Community.
This move could enhance MSFT’s position in the defense sector, expand its reach in critical national security projects, and drive long-term growth in high-demand government contracts.
On July 24, MSFT and Lumen Technologies (LUMN), a key technology and communications provider, announced a partnership to leverage Microsoft Cloud for Lumen’s digital transformation. The collaboration would help LUMN enhance its network capacity and also drive MSFT’s growth by boosting cloud usage and data center revenue, capitalizing on the growing AI demand.
MSFT’s total revenue increased 15.2% year-over-year to $64.73 billion for the fiscal 2024 fourth quarter that ended June 30, 2024. Its operating income grew 15.1% from the year-ago value to $27.93 billion. Moreover, the company’s net income and EPS came in at $22.04 billion and $2.95, both growing 9.7% from the prior year’s quarter, respectively.
Furthermore, the company’s total assets were $512.16 billion as of June 30, 2024, compared to $411.98 billion as of June 30, 2023.
For the fiscal 2025 first quarter ending September 2024, MSFT’s revenue is expected to increase 14.2% year-over-year to $64.53 billion. Its EPS for the ongoing quarter is expected to be $3.10, increasing 3.7% from the prior year’s period. Moreover, the company topped the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
Shares of MSFT have surged 10.7% over the past nine months and 23.9% over the past year to close the last trading session at $414.20.
MSFT’s POWR Ratings reflect its robust outlook. It has a B grade for Stability and Quality. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
MSFT is ranked #19 out of 39 stocks in the B-rated Software – Business industry.
In addition to the POWR Ratings highlighted above, one can access MSFT’s ratings for Growth, Momentum, Sentiment, and Value here.
Stock #2: NVIDIA Corporation (NVDA)
NVDA is a leading full-stack computing infrastructure firm, driving accelerated solutions for computational challenges. Its segments span Compute & Networking, and Graphics, serving diverse markets like gaming, professional visualization, data centers, and automotive sectors.
On August 27, NVDA introduced NVIDIA NIM™ Agent Blueprints, a versatile catalog of AI workflows designed for creating and deploying generative AI applications. These include customer service avatars, retrieval-augmented generation, and virtual drug discovery screening.
This new advancement could position NVDA to help enterprises customize open-source models, paving the way for its leading role in the AI revolution.
On July 29, NVDA revealed its commitment to advancing humanoid robotics by supplying services, models, and computing platforms to top robot manufacturers. The effort supports NVDA’s mission to drive global humanoid robotics development.
As robotics starts to play a key role in various industries, NVDA’s tools are set to ignite a technological revolution, enhancing its market presence and growth.
In the fiscal 2025 second quarter that ended July 28, 2024, NVDA’s revenue increased 122.4% year-over-year to $30.04 billion. The company’s non-GAAP operating income increased 156.4% year-over-year to $19.94 billion.
Additionally, its non-GAAP net income and non-GAAP net income per share came in at $16.95 billion and $0.68, indicating increases of 151.5% and 151.9% from the previous year’s quarter, respectively. As of July 28, 2024, NVDA’s total assets stood at $85.23 billion compared to $65.73 billion on January 28, 2024.
Street expects NVDA’s revenue and EPS for the fiscal 2025 third quarter (ending October 2024) to increase 81.6% and 84.1% year-over-year to $32.91 billion and $0.74, respectively. Moreover, the company surpassed the consensus revenue and EPS estimates in all four trailing quarters.
Shares of NVDA have surged 23.5% over the past six months and 137.2% over the past year to close the last trading session at $108.10.
NVDA’s fundamentals are reflected in its POWR Ratings. The stock has an A grade for Sentiment and a B for Quality.
It is ranked #36 in the 91-stock Semiconductor & Wireless Chip industry.
Beyond what we stated above, we have also given NVDA grades for Growth, Value, Stability, and Momentum. Get all the NVDA ratings here.
Stock #1: Alphabet Inc. (GOOGL)
GOOGL powers a wide range of global tech innovations and platforms. Its segments include Google Services, Google Cloud, and Other Bets, each addressing various digital needs and aspirations, driving advancements in search, cloud computing, and emerging technologies.
On May 2, GOOGL announced its collaboration with MongoDB, Inc. (MDB), an industry-leading developer data platform, to optimize Gemini Code Assist and provide enhanced suggestions for application development and modernization on MDB.
Gemini Code Assist will provide developers with access to MongoDB code, documentation, and best practices, enabling faster prototyping and application development. This strengthens GOOGL’s cloud services and developer tools, fostering innovation by enhancing developer experiences and speeding up time to market.
For the fiscal 2024 second quarter that ended June 30, 2024, GOOGL’s revenues increased 13.6% year-over-year to $84.74 billion. Its income from operations rose 25.6% from the year-ago value to $27.43 billion.
Moreover, the company’s net income was $23.62 billion, up 28.6% year-over-year. Its earnings per share grew 31.3% from the prior year’s quarter to $1.89 billion. In addition, the company’s cash and cash equivalents totaled $27.23 billion as of June 30, 2024, compared to $24.05 billion as of December 31, 2023.
The projected consensus for revenue and EPS stands at $86.27 billion and $1.84, respectively, marking a year-over-year increase of 12.5% in revenue and 18.5% in EPS for the fiscal third quarter ending September 2024. Furthermore, the company has topped the revenue and EPS estimates in each of the trailing four quarters.
GOOGL shares have surged 9.8% over the past six months and 10.2% over the past nine months to close the last trading session at $148.66.
GOOGL’s solid fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
GOOGL has a B grade for Sentiment, Stability, and Quality. Within the B-rated Internet industry, GOOGL is ranked #8 out of 52 stocks.
Beyond what I have stated above, we have also given GOOGL grades for Value, Growth, and Momentum. Get all GOOGL ratings here.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
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MSFT shares fell $0.17 (-0.04%) in premarket trading Wednesday. Year-to-date, MSFT has gained 10.75%, versus a 16.19% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal SugandhAanchal’s passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor’s degree in finance and is pursuing the CFA program.

She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.More…The post 3 AI Stocks Leading the Fourth Industrial Revolution appeared first on StockNews.com

Visa (V) is a global company leading in the consumer financial segment with a solid demand for its offerings, portfolio renovation, and strategic partnerships contributing to its continued growth. So, let’s determine whether Visa (V) is the right investment now. Read more to find out…Visa Inc. (V) is a global payment technology company. V operates VisaNet, a transaction processing network, and offers credit, debit, and prepaid card products, Visa Direct, Visa B2B Connect, Visa Cross-Border Solution, and Visa DPS. It reported solid third-quarter financial results with quarterly net revenue of $8.90 billion, indicating an increase of 9.9% from the prior year’s quarter.
With digital technologies, modes of payment and transactions have also evolved, including digital payments and cashless transactions. Total transaction value in the digital payments market is expected to reach $11.53 trillion in 2024 worldwide, whereas, in the United States, the transaction value is projected to reach $3.07 trillion and further grow at a CAGR of 10.7% to hit around $4.62 trillion by 2028.
Visa is efficiently leading this fast-paced development with its newly launched innovative product solutions and strategic partnership with industry leaders. Visa relaunched Visa SavingsEdge, aimed at delivering greater value to small businesses across the US and Canada. It announced a suite of new products and services for the Asia Pacific region and entered into technological collaboration with HSBC and Amazon.
On July 23, Visa’s board of directors declared a quarterly cash dividend of $0.52 per share of class A common stock paid on September 3, 2024, to all holders of record as of August 9, 2024. It also repurchased 17.2 million shares of class A common stock at an average cost of $276.75 per share for $4.8 billion. At the end of the quarter, V had $18.9 billion as remaining authorized funds for share repurchases.
The company’s payments volume increased 7%, while cross-border volume rose 14%, and processed transactions up 10%.
Ryan McInerney, Chief Executive Officer, Visa, commented, “During the quarter, we expanded our partnerships with many clients around the world and announced several innovations that will help drive the future of commerce.”
Shares of V have surged 10% over the past month and 15.5% over the past year to close its last trading session at $285.61.
Let’s look at factors that could influence V’s performance in the upcoming months.
Positive Recent Developments
On July 9, V and HSBC announced a technological collaboration to launch Zing, HSBC’s international money app that allows users to hold, send, and transact in multiple currencies. Zing leverages V’s technology for features like low-cost currency exchange and real-time payments and empowers UK members with international money needs.
On June 27, V announced a collaboration with Amazon to offer Canadian consumers installment payment options to eligible RBC and Scotiabank credit card holders. The convenient payment feature allows customers to convert their Amazon purchases into smaller, fixed payments over time.
Also, on June 13, V relaunched Visa SavingsEdge to deliver greater value to small businesses across the US and Canada. With the latest enhancements, Visa SavingsEdge has introduced a more dynamic platform with new offerings and features designed to support smarter spending and saving.
Robust Financials
During the third quarter that ended on June 30, 2024, V’s net revenue increased 9.9% year-over-year to $8.90 billion. The company’s operating income grew 18.2% from the year-ago value to $5.94 billion. V’s income before income taxes of $5.99 billion indicates growth of 16.4% year-over-year.
Further, the company’s non-GAAP net income and non-GAAP EPS amounted to $4.91 billion and $2.42, up 9.1% and 12% from the prior year’s quarter, respectively.
Also, as of June 30, 2024, the company’s total assets stood at $91.04 billion, up from total assets of $90.50 billion as of September 30, 2023.
Solid Historical Growth
V’s revenue and EBITDA have grown at respective CAGRs of 15.5% and 16.4% over the past three years. The company’s EBIT has increased at a CAGR of 16.8% over the same timeframe, while its net income and EPS have improved at CAGRs of 20.7% and 23.6%, respectively.
Furthermore, the company’s total assets and levered free cash flow have improved at respective CAGRs of 3.3% and 13.6% over the past three years.
Favorable Analyst Estimates
Analysts expect V’s revenue for the fourth quarter (ending September 2024) to grow 10.1% year-over-year to $9.48 billion. The consensus EPS estimate of $2.58 for the same period indicates a 10.6% year-over-year improvement. Also, V has an impressive earnings surprise history, having topped consensus EPS estimates in each of the trailing four quarters.
For the fiscal year ending September 2024, the company’s revenue and EPS are expected to grow 9.6% and 13.1% year-over-year to $35.80 billion and $9.92, respectively. Additionally, Street expects its revenue and EPS for the fiscal year 2025 to increase 9.9% and 11.6% year-over-year to $39.34 billion and $11.07, respectively.
High Profitability
V’s trailing-12-month gross profit margin and EBITDA margin of 97.80% and 69.83% are 61.6% and 210.2% higher than the respective industry averages of 60.51% and 22.51%. Its trailing-12-month net income margin of 54.72% is considerably higher than the industry average of 22.43%. Similarly, the stock’s trailing-12-month levered FCF margin of 42.09% is 135.5% higher than the industry average of 17.87%.
Furthermore, V’s trailing-12-month ROCE, ROTC, and ROTA of 49.85%, 24.38%, and 20.99% are favorably compared to the industry averages of 10.32%, 6.91%, and 1.05%, respectively.
POWR Ratings Reflect Promise
V’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. V has a B grade for Quality, in sync with its higher-than-industry profitability.
Furthermore, the stock also has a B grade for Stability, in sync with its beta of 0.89.
V is ranked #12 in the 47-stock Consumer Financial Services industry.
Beyond what I have stated above, we have also given V grades for Sentiment, Value, Momentum, and Growth. Get access to all the V Ratings here.
Bottom Line
Visa is a leading payment technology company that is maintaining its leadership position with innovative solutions and technological collaborations and rebranding its product offerings. Also, the company’s long-term prospects are fueled by its robust growth trajectory, broadening operations, and strong financial performance.
Given V’s outstanding financials, accelerating profitability, reliable dividends, and promising growth outlook, V could be an ideal buy for solid returns.
How Does Visa Inc. (V) Stack Up Against Its Peers?
While V has an overall POWR Rating of B, investors could also check out these other stocks within the Consumer Financial Services industry with A (Strong Buy) or B (Buy) ratings: Regional Management Corp. (RM), Atlanticus Holdings Corporation (ATLC), and INNOVATE Corp. (VATE).
For exploring more A and B-rated consumer financial stocks, click here.
What To Do Next?
Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:
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V shares were unchanged in premarket trading Tuesday. Year-to-date, V has gained 10.33%, versus a 15.69% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari SaxenaRajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.More…The post Is Visa a Buy as Digital Transactions Continue to Soar? appeared first on StockNews.com

Online education is the new norm in today’s learning scenario as it is cost-effective and flexible. Amid this backdrop, we have three stocks, Graham Holdings (GHC), Grand Canyon Education (LOPE), and Stride, Inc. (LRN), that could be schooling the market for years to come and are worth keeping an eye for. Read more…Online education stocks are catching the market’s eye as they have positioned themselves with the growing demand for remote learning and digital education solutions. This shift toward digital learning has turned a niche market into a booming industry.
With this momentum, online education companies that are well positioned, Graham Holdings Company (GHC), Grand Canyon Education, Inc. (LOPE), and Stride, Inc. (LRN), have been reshaping and making it the mainstream mode of education in the world.
According to Statista, the global market revenue of online education services is anticipated to reach $279.30 billion by 2029, exhibiting a CAGR of 8.6%. This market, accelerated by the pandemic, has been growing as new technologies are also being integrated into it.
Furthermore, the efficiency and appeal of online education are being improved by technological innovations, including AI-powered personalized learning, virtual reality (VR) classrooms, and advanced learning management systems. The global EdTech market is projected to reach $598.82 billion by 2032, growing at a CAGR of 17.1%.
Given this backdrop, let’s analyze the fundamentals of three featured Outsourcing – Education Services stocks, beginning with #3.
Stock #3: Graham Holdings Company (GHC)
GHC is a global diversified education and media holding company. It operates through six segments: Kaplan International; Kaplan Higher Education; Kaplan Supplemental Education; Television Broadcasting; Manufacturing; and Healthcare and Automotive. 
On August 8, the company paid its shareholders a quarterly dividend of $1.72 per share. GHC pays an annual dividend of $6.88, which translates to a yield of 0.94% at the current share price. Moreover, its dividend payouts have increased at a CAGR of 4.4% over the past three years.
In terms of the trailing-12-month cash per share, GHC’s $31.98 is significantly higher than the $2.48 industry average. However, its 9.48% trailing-12-month EBITDA margin is 14% lower than the industry average of 11.45%.
For the six-month period that ended on June 30, 2024, GHC’s operating revenues increased 9.4% year-over-year to $2.34 billion, while the company’s Education segment reported operating revenue of $845.50 million, indicating an 8.4% growth from the prior-year period.
GHC’s adjusted net income came in at $107.32 million, up 5.8% year-over-year, while its adjusted income per share grew 12.9% from the year-ago value to $23.99.
Analysts expect GHC’s revenue for the third quarter (ending September 2024) to increase 10.6% year-over-year to $1.23 billion, while its EPS for the same period is expected to grow 46.5% from the prior year’s period to $15.31.
The stock has gained 28.7% over the past year and 15.5% over the past nine months to close the last trading session at $732.27.
GHC’s stance is apparent in its POWR Ratings. The stock has a B grade for Value and Stability. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
Among the 19 stocks in the A-rated Outsourcing – Education Services industry, it is ranked #11. Click here to see the additional GHC ratings (Growth, Momentum, Sentiment, and Quality).
Stock #2: Grand Canyon Education, Inc. (LOPE)
LOPE is an education services company that primarily serves colleges and universities. It develops technological solutions, infrastructure, and operational processes to provide services to its institutions on a large scale and offers technological and academic services.
The stock’s trailing-12-month net income margin of 21.88% is 381.5% higher than the industry average of 4.54%. Similarly, its 22.10% trailing-12-month ROTA is 444.6% above the industry average of 4.06%. Also, its trailing-12-month levered FCF of 17.20% compares favorably to the industry average of 5.14%.
During the second quarter that ended on June 30, 2024, LOPE’s service revenue increased 8% year-over-year to $227.46 million. The company’s operating income came in at $42.72 million, reflecting an increase of 20.5% from the prior-year quarter.
Its non-GAAP net income amounted to $37.32 million and $ $1.27 per share, reflecting 21.9% and 25.7% year-over-year increases, respectively. In addition, its adjusted EBITDA increased by 22.6% year-over-year, amounting to $58.53 million.
Looking ahead, LOPE anticipates full-year service revenue for fiscal year 2024 to fall between $1.026 billion and $1.034 billion, and operating margin is anticipated to be in the range of 26.7%-27.2%. The company also projects non-GAAP income per share to range from $7.88 to $8.07.
The consensus revenue estimate of $239.68 million for the fiscal third quarter (ending September 2024) represents an 8% increase year-over-year. The consensus EPS estimate of $1.47 for the same quarter indicates a 16.7% improvement year-over-year. The company has an impressive surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
Over the past year, the stock has surged 23.4%, closing the last trading session at $137.41.
LOPE’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It also has an A grade for Sentiment and a B for Quality. Within the same A-rated industry, it is ranked #9 out of 19 stocks. Click here to see LOPE’s ratings for Growth, Value, Momentum, and Stability.
Stock #1: Stride, Inc. (LRN)
LRN, a technology-based education service company, provides proprietary and third-party online curriculum, software systems, and educational services worldwide. The company serves public and private schools, charter boards, consumers, employers, and government agencies.
On September 5, LRN launches Road2Teach, a new teacher program, in Indiana. This new program will offer two non-degree-granting programs to help aspiring teachers transition to teaching and pass their teacher certification exams. This program has two sections: Elementary Education program and Secondary education program. The new program is set to expand the company’s offerings.
LRN’s trailing-12-month ROCE and ROTA of 19.23% and 10.63% are 67.8% and 162.1% higher than their respective industry averages of 11.47% and 4.06%. Likewise, its trailing-12-month asset turnover ratio of 1.11x is 11.7% above the industry average of 0.99x.
LRN’s revenues for the fourth quarter, which ended on June 30, 2024, increased 10.5% year-over-year to $534.18 million. Its adjusted operating income rose 36.4% from the year-ago value to $87.89 million.
The company’s attributable net income amounted to $62.78 million, representing a 44.8% increase from the same period last year, and its attributable net income per share for the quarter increased 40.6% year-over-year to $1.42. Also, the adjusted EBITDA came in at $112.09 million reflecting an increase of 26.3% from the prior year quarter.
Street expects LRN’s revenue for the first quarter of fiscal 2025 (ending September 2024) to increase 5.4% year-over-year to $506.09 million. Moreover, its EPS estimate of $0.26 for the same period indicates a significant year-over-year growth. In addition, it surpassed the consensus revenue estimates in each of the trailing four quarters, which is excellent.
LRN shares have surged 84% over the past year to close the last trading session at $79.49.
It’s no surprise that LRN has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B grade for Growth. Within the Outsourcing – Education Services industry, it is ranked #8 out of 19 stocks.
Click here to see the other ratings of LRN for Value, Momentum, Stability, Sentiment and Quality.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
2024 Stock Market Outlook >

LOPE shares were trading at $137.10 per share on Monday morning, down $0.31 (-0.23%). Year-to-date, LOPE has gained 3.83%, versus a 15.64% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka DuttaAnushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.More…The post 3 Online Education Stocks Ready to School the Market appeared first on StockNews.com

With Alphabet (GOOGL) facing growing antitrust challenges, investors question whether the tech giant remains a buy. Discover if GOOGL’s financial strength and massive growth in AI and cloud can offset regulatory risks. Read on to learn more…Alphabet Inc. (GOOGL) has been a dominant player in the tech industry. However, it faces increased scrutiny from regulators worldwide. Google is set to face trial next week in a second antitrust case, where the U.S. Department of Justice (DOJ) will challenge the company’s methods of monetizing advertising, which prosecutors claim harms news publishers.
This case is part of the Biden administration’s broader push to curb the power of Big Tech through antitrust laws. It follows a significant victory for the Justice Department in a separate lawsuit on August 5, when a judge ruled that Google illegally monopolized online search.
Despite these looming challenges, GOOGL’s financial strength remains undeniable. The company reported better-than-expected revenue and earnings for the second quarter of 2024. Alphabet reported revenues of $84.74 billion, surpassing analysts’ estimate of $84.30 billion. The company’s EPS came in at $1.89, compared to the consensus estimate of $1.84.
Its main revenue drivers—Google Search, YouTube, and Google Cloud—remain robust. The company’s advertising arm, which is at the center of antitrust scrutiny, still accounts for a significant portion of its revenue, and its dominance in digital ads has positioned Alphabet as a key player in the tech ecosystem.
Additionally, Alphabet is well-diversified with its growing cloud business, artificial intelligence (AI) advancements, and other ventures such as Waymo (autonomous driving) and Verily (health technology).
Shares of GOOGL have gained 17.4% over the past month and 15.3% over the past six months to close the last trading session at $156.45.
Let’s look at factors that could influence GOOGL’s performance in the upcoming months.
Outstanding Financials
For the second quarter that ended June 30, 2024, GOOGL’s revenues increased 13.6% year-over-year to $84.74 billion. Its operating income rose 25.6% from the year-ago value to $27.43 billion. Its net income was $23.62 billion, up 28.6% year-over-year. Its earnings per share grew 31.3% from the prior year’s quarter to $1.89 billion.
In addition, the company’s cash and cash equivalents totaled $27.23 billion as of June 30, 2024, compared to $24.05 billion as of December 31, 2023. Its total assets were $414.77 billion versus $402.39 billion as of December 31, 2023.
Favorable Analyst Estimates
Analysts expect GOOGL’s revenue for the third quarter (ending September 2024) to grow 12.5% year-over-year to $86.26 billion. The consensus EPS estimate of $1.84 for the ongoing quarter indicates an improvement of 18.5% year-over-year. Further, the company has surpassed consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.
For the fiscal year ending December 2024, Wall Street expects Alphabet’s revenue and EPS to increase 13% and 31.5% from the previous year to $347.35 billion and $7.63, respectively. The company’s revenue and EPS for the fiscal year 2025 are expected to grow 11.3% and 14% year-over-year to $386.67 billion and $8.69, respectively.
Solid Historical Growth
GOOGL’s revenue has grown at a CAGR of 17.2% over the past five years. Its EBITDA has increased at a CAGR of 20.9% over the same period, and its levered free cash flow has grown at a CAGR of 16%. Furthermore, the company’s net income and EPS have improved at CAGRs of 20.3% and 23% over the same timeframe, respectively.
Additionally, the company’s total assets have increased at a CAGR of 10% over the past five years.
Robust Profitability
GOOGL’s trailing-12-month gross profit margin of 57.64% is 13.3% higher than the 50.88% industry average. Its trailing-12-month EBITDA margin of 35.18% is 90.5% higher than the 18.47% industry average. Likewise, the stock’s trailing-12-month net income margin of 26.70% is significantly higher than the industry average of 3.24%.
Furthermore, GOOGL’s trailing-12-month ROCE, ROTC, and ROTA of 30.87%, 20.34%, and 21.13% are considerably higher than the industry averages of 3.49%, 3.81%, and 1.37%, respectively. The stock’s trailing-12-month levered FCF margin of 13.40% is 65.3% higher than the industry average of 8.10%.
POWR Ratings Reflect Promise
GOOGL’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. GOOGL has an A grade for Sentiment, in sync with its favorable analyst expectations. In addition, the stock has a B grade for Quality, consistent with higher-than-industry profitability.
Within the B-rated Internet industry, GOOGL is ranked #8 out of 52 stocks.
Beyond what I have stated above, we have also given GOOGL grades for Value, Growth, Momentum, and Stability. Get all GOOGL ratings here.
Bottom Line
While Alphabet’s dominance in search and digital ads has put it in the crosshairs of antitrust regulators, its outstanding financial performance, innovation in AI and cloud, and expansion into new markets make it a compelling long-term investment. Given robust financials and a bright growth outlook, GOOGL could be an ideal investment for potential gains.
How Does Alphabet Inc. (GOOGL) Stack Up Against Its Peers?
While GOOGL has an overall POWR Rating of B, investors could also check out these other stocks within the Internet industry with an A (Strong Buy) rating: Meituan ADR (MPNGY), Dingdong (Cayman) Ltd (DDL), and Travelzoo (TZOO).
To explore more A or B-rated internet stocks, click here.
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Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:
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GOOGL shares were trading at $156.58 per share on Thursday afternoon, up $0.13 (+0.08%). Year-to-date, GOOGL has gained 12.22%, versus a 16.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur BounsMangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.More…The post With Antitrust Challenges Looming, Is Alphabet Still a Buy? appeared first on StockNews.com

“Weak Manufacturing Measures Raise Specter of US Economic Slowdown” This headline on CNBC cracks me up that the market sold off on the first trading session of September because of increased fears of recession. That is utter non-sense because the manufacturing data they site was up month over month…and better than most of the readings

Today, the rapid rise of technological advancements and AI-driven innovations has brought unprecedented convenience, but it also leaves us more vulnerable to cyber threats and privacy breaches. These dangers aren’t confined to just one nation but have a global impact, making robust cybersecurity solutions more critical than ever. Given this landscape, it could be wise

Zoetis Inc. (ZTS), the world’s leading animal health company, reported outstanding results for the second quarter of 2024 and raised its full-year guidance. The company’s revenue came in at $2.36 billion, surpassing analysts’ estimate of $2.31 billion. It posted adjusted net income per share of $1.56 for the second quarter, compared to the consensus estimate

The global digital payments market is witnessing positive trends as consumers are increasingly preferring digital and contactless payment options over traditional methods of payment. So, investors could consider buying fundamentally sound consumer financial services stocks, such as American Express Company (AXP), Visa Inc. (V), and Mastercard Incorporated (MA), powering the cashless society. The digital payment

The MedTech sector is transforming modern healthcare through the integration of AI, cloud computing, and the Internet of Medical Things (IoMT), which facilitates personalized and remote patient care. This surge in demand is fueled by the ability of these technologies to enhance outcomes, lower costs, and improve access to care. As MedTech continues to drive

Technological advancements like artificial intelligence (AI) are reshaping the machinery industry in today’s rapidly evolving world. As the industry sprints toward a digital future, companies are reconsidering their production strategies to meet the soaring demand. This shift is driving competition among industry leaders to establish new manufacturing centers and capitalize on the growing opportunities. Investors