Apple Inc. (AAPL), Google Inc (GOOG): Two Tech Stocks to Watch in July

The major reason for the decline in Google Inc (NASDAQ:GOOG)’s advertising profitability is the higher traffic acquisition costs associated with the fiercely competitive mobile environment.

The key areas for investors to watch are traffic acquisition costs and revenue growth.

Last quarter, traffic acquisition costs increased to 7.9% of revenues generated from Google Inc (NASDAQ:GOOG) properties versus 6.4% in the year-ago quarter. Though a sequential increase is acceptable as Google’s ad revenue continues to shift to mobile, a significant jump could have investors worried.

With such a lofty valuation, investors should hope that Google Inc (NASDAQ:GOOG) maintains 16% or greater revenue growth in advertising revenues. A surprise on either the upside or downside could cause some volatility in the stock price.

What do you think?
As leaders in their respective markets, Apple and Google Inc (NASDAQ:GOOG) are tech stocks to watch anytime they report earnings. But with Apple getting very cheap and Google becoming increasingly expensive, the earnings showdown between the two is starting to get a bit more interesting.

Has Apple Inc. (NASDAQ:AAPL)’s gross margin bottomed out? Will it beat estimates?

Can Google maintain its impressive revenue growth? When will the increases in traffic acquisition costs stop?

Let us know what you think by leaving a comment.

The article 2 Tech Stocks to Watch in July originally appeared on Fool.com and is written by Daniel Sparks.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Google.

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