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Alphabet’s GOOGL third-quarter 2021 results, which are scheduled to be released on Oct 26, are likely to reflect strength in its cloud arm, Google Cloud.
Google Cloud has turned out to be the key catalyst behind the company’s growth on the back of its strengthening cloud service offerings.
Notably, the company’s cloud offerings include Google Cloud Platform and Google Workspace, which are continuously gaining momentum in the booming cloud computing market. Google’s growing investments in infrastructure, security, data management, analytics and AI remain major positives.
Alphabet is persistently witnessing strong growth in the revenues generated from the underlined segment, which derives revenues from fees collected for Google Cloud Platform services and Google Workspace collaboration tools.
Revenues from the segment were $4.6 billion in second-quarter 2021. The figure accounted for 7.5% of total revenues and exhibited year-over-year growth of 53.9%.
For third-quarter 2021, the Zacks Consensus Estimate for Google Cloud revenues is pegged at $5.01 billion, suggesting growth of 45.5% from the prior-year quarter’s reported figure.
Click here to know how the company’s overall third-quarter results are likely to be.
Alphabet Inc. Revenue (TTM)
Alphabet Inc. revenue-ttm | Alphabet Inc. Quote
Factors to Consider
Google’s strengthening efforts toward the expansion of its cloud services portfolio, data centers, availability zones and regions are likely to have helped it in gaining share in the highly competitive cloud market.
Google Cloud collaborated with Workday WDAY to enable businesses to run Workday enterprise applications for finance, HR, and planning in a public cloud environment.
Google Cloud collaborated with AT&T T and unveiled end-to-end edge solutions, including on-premise multi-access edge compute solutions. Notably, businesses, using the new solutions, will benefit from AT&T’s network edge capabilities as well as Google’s Android, Pixel, augmented reality and virtual reality, Google Maps, and other solutions.
Google Cloud introduced two services — Filestore Enterprise and Backup for Google Kubernetes Engine (GKE) — in a bid to bolster its cloud storage offerings.
Further, the company made topic retention generally available in the quarter-to-be-reported in order to boost the capabilities of Pub/Sub.
The company announced the availability of Key Visualizer for Cloud Spanner. This is likely to have aided it in delivering enhanced Spanner experience to developers and administrators.
All the endeavors are expected to have benefited the third-quarter performance of Google Cloud. Strengthening cloud offerings are likely to have aided Google Cloud’s competitive position against peers like Amazon’s AMZN AWS, Microsoft Azure, Alibaba Cloud and IBM Cloud. The impacts of this are also likely to get reflected in the upcoming results of Alphabet.
Currently, Alphabet carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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