5 Latest Earnings That Surprised Wall Street

4. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 160

Alphabet Inc. (NASDAQ:GOOG) reported on July 26 its Q2 results. The company reported Q2 GAAP earnings per share of $1.21, missing market estimates by $0.06. The revenue of $69.69 billion climbed 12.6% on a year over year basis, falling short of analysts’ predictions by $110 million. The net income declined to $16 billion compared to last year’s $18.53 billion. Traffic acquisition costs increased 11.8% to $12.2 billion. 

On July 27, Susquehanna analyst Shyam Patil lowered the price target on Alphabet Inc. (NASDAQ:GOOG) to $150 from $187 and maintained a Positive rating on the shares. The analyst observed that Q2 results were better than expected, though management did indicate difficult 2H comps, macro uncertainty, and foreign exchange headwinds. He said while Alphabet Inc. (NASDAQ:GOOG) will not be immune to macro challenges, he continues to think that Search should be one of the most resilient categories of digital spend and drive solid support for the company overall.

Among the hedge funds tracked by Insider Monkey, Alphabet Inc. (NASDAQ:GOOG) was part of 160 public stock portfolios at the end of Q1 2022, up from 158 funds in the earlier quarter. Jean-Marie Eveillard’s First Eagle Investment Management is a significant stakeholder of the company, with 23.60 million shares worth about $2 billion. 

Here is what Wedgewood Partners has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2022 investor letter:

“Alphabet grew its core search revenues +24% on a +30% year-ago comparison. Despite this stellar top-line performance, shares sold off as the market began to discount fears of a recession. However, the stock has outperformed relative to other holdings as core Google Search has been less affected by disruptions related to Apple’s privacy initiatives. Alphabet’s Cloud segment is generating revenue at a $24 billion run rate but is still running at a loss. We think this business can generate much better margins at some point. In the meantime, the Company has 4% to 5% of shares authorized for repurchase which is an attractive use of capital as the stock trades for about just 18X 2023 consensus estimates.”