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I don’t know if it’s the actual reason, but they missed ad revenue expectations according to Yahoo. https://finance.yahoo.com/news/stock-market-today-nasdaq-fa

I don’t know if it’s the actual reason, but they missed ad revenue expectations according to Yahoo. https://finance.yahoo.com/news/stock-market-today-nasdaq-falls-ahead-of-big-tech-earnings-210135193.html https://finance.yahoo.com/news/stock-market-today-nasdaq-fal...

atorodius 3y ago
Hm there it says Revenue, excluding traffic acquisition costs: $72.32 billion vs. $70.97 billion expected ($63.12 billion in Q4 2022) Adjusted earnings per share: $1.64 vs. $1.59 expected ($1.05 in Q4 2022) Cloud revenue: $9.19 billion vs. $8.95 billion expected ($7.32 billion in Q4 2022) Ad revenue: $65.5 billion vs. $65.8 billion expected ($59.04 billion in Q4 2022) I hope that 0.3 is not the reason for that slip haha
- boomfunky 3y ago
  There could be other factors in play like the recent volatility in Netflix within the same sector, as well as the upcoming FOMC meeting tomorrow causing increased fear. Markets aren't always as accurate and efficient as some believe, and stock prices always become more volatile around earnings.
  - jsnell 3y ago
    All those other factors would have been priced in at the end of the day. The only new information since then would have been the earnings release. If the absolute numbers are better than expected, then maybe it's the relative numbers (as compared to Microsoft who also released earnings) that are worse than expected?
    - pie420 3y ago
      Also keep in mind that the "expected" are not the actual expected, but rather "publicly expected numbers that are freely given out and therefore useless". Investment firms have private expected numbers that are far more accurate, the publicly given out ones are designed to manipulate retail investors.
    - boomfunky 3y ago
      Completely true, it would be a combination of both. Clearly it didn't meet a lot of expectations indicated by the selloff, but selling could also be aggravated by a sell day in the Nasdaq/XLC and high impact economic events on the horizon. This is all conjecture from me, I am by no means a market expert, just offering a way to rationalize the above comment on how a good/"not that bad" earnings report can still result in a stock having a large selloff.
- matwood 3y ago
  Google missing on ad revenue is like Apple missing on iPhone revenue. It's even worse for Google because it's a larger part of their business. Is the miss a blip or a signal of a slowing ad market or are LLMs eating into their business? Hard to know, but that's the concern.
  - Grazester 3y ago
    LLM is not doing anything given that Bing's growth since adding chat-gpt has been negligible.
    - epolanski 3y ago
      You have solid numbers behind your claim? By the way people are asking chatgpt or copilot what they used to Google. Not everything but a lot. I most certainly do and I think I'm not alone.
      - Grazester 3y ago
        Isn't Bing Google biggest search competition? Is the general public using chat as a general search engine to replace the more traditional search engine or is it just us tech people. I can tell you I know of no one doing this outside of tech coworkers and even then just use it for programming related tasks to a very limited way. https://www.bloomberg.com/news/articles/2024-01-18/microsoft-s-bing-market-share-barely-budged-after-adding-chatgpt?embedded-checkout=true https://www.bloomberg.com/news/articles/2024-01-18/microsoft...
        epolanski 3y ago
        Google's biggest competition is whatever makes people use their search less. I know for sure some people who use chatgpt in place of Google search like students or people needing translations.
  - VikingCoder 3y ago
    Ad revenue: $65.5 billion vs. $65.8 billion expected ($59.04 billion in Q4 2022) Right, they got $300 million less than expected. Which means they only got 99.544072948% of what the analysts expected. That means they missed analyst expectations by 0.455927052%. Not for total Revenue. Not for EPS. Not for net income. Not for diluted EPS. For the one category, Ad Revenue. Resulting in a 6% after-market drop. 0.455927052% miss. 6% drop. I think it's entirely possible that people focus too much on short term metrics and not enough on long-term growth.
- crowcroft 3y ago
  Almost definitely the case that people are disappointed in the ad revenue. GCP is growing to be a meaningful part of Google's revenue, but the actual profit at Google is almost entirely ad revenue. If that is a miss, and on the horizon we see AI disrupting search and increased competition in digital video advertising then what does that mean for the future of Google? I think that's probably being a bit pessimistic, but that's probably the argument.
- christkv 3y ago
  Considering the massive amount of ads on YouTube now there seems to be something amiss. Are the ad rates going down?

atorodius 3y ago

Hm there it says Revenue, excluding traffic acquisition costs: $72.32 billion vs. $70.97 billion expected ($63.12 billion in Q4 2022) Adjusted earnings per share: $1.64 vs. $1.59 expected ($1.05 in Q4 2022) Cloud revenue: $9.19 billion vs. $8.95 billion expected ($7.32 billion in Q4 2022) Ad revenue: $65.5 billion vs. $65.8 billion expected ($59.04 billion in Q4 2022) I hope that 0.3 is not the reason for that slip haha

boomfunky 3y ago
There could be other factors in play like the recent volatility in Netflix within the same sector, as well as the upcoming FOMC meeting tomorrow causing increased fear. Markets aren't always as accurate and efficient as some believe, and stock prices always become more volatile around earnings.
- jsnell 3y ago
  All those other factors would have been priced in at the end of the day. The only new information since then would have been the earnings release. If the absolute numbers are better than expected, then maybe it's the relative numbers (as compared to Microsoft who also released earnings) that are worse than expected?
  - pie420 3y ago
    Also keep in mind that the "expected" are not the actual expected, but rather "publicly expected numbers that are freely given out and therefore useless". Investment firms have private expected numbers that are far more accurate, the publicly given out ones are designed to manipulate retail investors.
  - boomfunky 3y ago
    Completely true, it would be a combination of both. Clearly it didn't meet a lot of expectations indicated by the selloff, but selling could also be aggravated by a sell day in the Nasdaq/XLC and high impact economic events on the horizon. This is all conjecture from me, I am by no means a market expert, just offering a way to rationalize the above comment on how a good/"not that bad" earnings report can still result in a stock having a large selloff.
matwood 3y ago
Google missing on ad revenue is like Apple missing on iPhone revenue. It's even worse for Google because it's a larger part of their business. Is the miss a blip or a signal of a slowing ad market or are LLMs eating into their business? Hard to know, but that's the concern.
- Grazester 3y ago
  LLM is not doing anything given that Bing's growth since adding chat-gpt has been negligible.
  - epolanski 3y ago
    You have solid numbers behind your claim? By the way people are asking chatgpt or copilot what they used to Google. Not everything but a lot. I most certainly do and I think I'm not alone.
    - Grazester 3y ago
      Isn't Bing Google biggest search competition? Is the general public using chat as a general search engine to replace the more traditional search engine or is it just us tech people. I can tell you I know of no one doing this outside of tech coworkers and even then just use it for programming related tasks to a very limited way. https://www.bloomberg.com/news/articles/2024-01-18/microsoft-s-bing-market-share-barely-budged-after-adding-chatgpt?embedded-checkout=true https://www.bloomberg.com/news/articles/2024-01-18/microsoft...
      - epolanski 3y ago
        Google's biggest competition is whatever makes people use their search less. I know for sure some people who use chatgpt in place of Google search like students or people needing translations.
- VikingCoder 3y ago
  Ad revenue: $65.5 billion vs. $65.8 billion expected ($59.04 billion in Q4 2022) Right, they got $300 million less than expected. Which means they only got 99.544072948% of what the analysts expected. That means they missed analyst expectations by 0.455927052%. Not for total Revenue. Not for EPS. Not for net income. Not for diluted EPS. For the one category, Ad Revenue. Resulting in a 6% after-market drop. 0.455927052% miss. 6% drop. I think it's entirely possible that people focus too much on short term metrics and not enough on long-term growth.
crowcroft 3y ago
Almost definitely the case that people are disappointed in the ad revenue. GCP is growing to be a meaningful part of Google's revenue, but the actual profit at Google is almost entirely ad revenue. If that is a miss, and on the horizon we see AI disrupting search and increased competition in digital video advertising then what does that mean for the future of Google? I think that's probably being a bit pessimistic, but that's probably the argument.
christkv 3y ago
Considering the massive amount of ads on YouTube now there seems to be something amiss. Are the ad rates going down?