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What’s happening: Shares of Google-parent Alphabet gained in after-hours trading on Tuesday, following the release of the company’s results for the third quarter.
What happened: The tech giant reported stronger-than-expected sales and earnings for the latest quarter.
Alphabet reported sharp growth in its cloud business, while recording a 12% surge in its mainstay Search business.
How were the results: The Mountain View, California-based company reported low double-digit growth in sales in the July to September period.
Why it matters: Alphabet is the first major technology company to report quarterly earnings this season. Google has been improving its AI-powered search, continuing to accelerate its investment in the same.
Alphabet’s capex rose by 62% to $13 billion in the third quarter, while the fourth quarter is projected to be similar, the company’s new CFO Anat Ashkenazi said.
Revenues from Google subscribers, platform and devices climbed to $10.7 billion, from $8.3 billion in the year-ago quarter. Google Cloud revenues gained 35% year-over-year for the quarter, driven by continued growth from AI. The company’s Cloud business surged at the fastest rate in eight quarters.
“Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools,” CEO Sundar Pichai stated.
The company’s digital advertising sales, which is the biggest contributor to total revenues, jumped 10% to $65.85 billion.
YouTube surpassed $50 billion in total ads and subscription revenues over the past four quarters.
How shares responded: Alphabet’s shares surged 5.8% to $179.50 in after-hours trading, following the release of quarterly results. The stock has climbed around 23% year to date.
What to watch: Investors will continue monitoring rising competition from Amazon and TikTok in the digital ad market. Alphabet’s AI investments will also remain in focus.
Context: The GBP/USD forex pair edged higher this morning, as investors assessed the latest economic data.
Details: Data released on Tuesday showed net consumer credit in the UK rising by £1.2 billion in September, from £1.4 billion in the previous month. However, the figure was lower than market expectations of £1.3 billion.
Net borrowing of mortgage debt by individuals declined by £0.3 billion to £2.54 billion in September, while net mortgage approvals for house purchases rose by 700 to 65,650.
Weakness in the US dollar lent some support to the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped around 0.1% to 104.20 this morning.
The GBP/USD forex pair rose slightly to 1.3017, while the EUR/GBP pair edged higher to 0.8315 this morning. The FTSE 100 index lost 0.8% to close at 8,219.61 on Tuesday.
What to watch: Chancellor of the Exchequer Rachel Reeves is scheduled to deliver the Labour Party’s budget to parliament today.
Investors await the release of economic data on housing prices and manufacturing PMI from the UK later this week. Nationwide house prices, which rose by 0.7% in September, are expected to rise by 0.3% in October. Analysts expect the S&P Global UK manufacturing PMI to decline to 50.3 in October, from 51.5 in September.
Other Markets: US trading indices closed mixed on Tuesday, with the S&P 500 and Nasdaq 100 up by 0.16% and 0.98%, respectively, and the Dow Jones index down by 0.36%.
The US President Joe Biden said North Korea helping Russia in its war with Ukraine by sending troops is “very dangerous”. The news sent the RUB/USD pair higher in forex trading this morning.
Canada’s wholesale sales grew by 0.9% in September, following a 0.6% decline in the previous month, which lent support to the CAD/USD forex pair.
The Philippines said that producer prices declined 1.4% year-over-year in September, after easing by 1.1% fall in the previous month. However, which sent the PHP/USD pair lower in forex trading this morning.
Ireland’s retail sales rose by 0.5% in September, compared to a 1.2% decline in August, lending support to the EUR/USD forex pair.
Australia’s annual inflation rate eased to 2.8% in the third quarter, from 3.8% in the previous quarter. This being the lowest reading since the first quarter of 2021 sent the AUD/USD pair higher in forex trading this morning.
France’s GDP growth rate and household consumption, Turkey’s economic confidence index, Spain’s GDP growth rate, consumer price index and industry confidence indicator, Germany’s number of unemployed individuals, jobless rate, GDP growth rate and consumer prices, Italy’s gross domestic product and producer price inflation, Eurozone’s gross domestic product, economic sentiment indicator, consumer confidence, consumer confidence price trends over next 12 months, industry confidence indicator, selling price expectations and services sentiment indicator, Brazil IGP-M inflation, net payrolls and producer price inflation, US MBA mortgage applications, GDP growth rate, crude oil inventories, gasoline stocks change and distillate stocks, India’s infrastructure output and money supply M3, Mexico’s GDP growth rate, South Africa’s government budget value, Russia’s unemployment rate, business confidence, corporate profits, real wage growth, retail sales and GDP growth rate, as well as Saudi Arabia’s money supply M3 and value of loans.
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