Google Q2 - Beastly results

Sometimes, it is a tough day in the office. On Tuesday night, Google posted results that handily beat analyst exceptions on both revenue and profits. Disappointingly, the stock dropped 5% yesterday. The only letdown in Google's results was that YouTube's revenue grew slightly slower than expected, by 13% instead of 16%.

YouTube has spent 17 months as the top US video streaming service. Interestingly, sport streaming hours grew 30% over the last year. When you think of the platform, sport isn't the first thing that comes to mind, but Google is investing in sporting content to keep more customers coming back.

Google is a beast. They grew revenue by 13% for the year, at widening profit margins, so earnings per share shot up 31%. Looking forward, they are investing heavily into AI infrastructure, which you might think would cause a short term drop in profitability, but it won't. Google is forecasting a continued growth in profit margins.

Google is the cheapest of all the mega-cap tech companies, trading on a forward price to earnings ratio of just 23. It's good to see that their cloud services, YouTube and AI revenues are strong, making the group less reliant on search advertising sales. The company looks relatively cheap given that it is expecting to continue to grow revenue and profit by double digits for the foreseeable future. We should all be accumulating these shares.