Alphabet stock surges 10% on back of blowout earnings

Sundar Pichai, CEO of Google

Anindito Mukherjee | Bloomberg | Getty Images

Shares of Alphabet continued to spike in the premarket after the Google parent company reported blowout fourth-quarter earnings.

The company’s stock was up more than 10% in premarket trading.

Alphabet reported earnings per share of $ 30.69, compared to the $ 27.34 expected, according to Refinitiv. It also posted a large revenue beat, coming in at $ 75.33 billion compared to the $ 72.17 billion estimated.

The company relies heavily on Google’s advertising revenue, which jumped in the quarter. Revenue for the segment came in at $ 61.24 billion for the quarter, up 33% from $ 46.2 billion in the same period a year earlier.

“Very robust advertising revenue growth implies the overall demand environment has stayed healthy amidst volatile supply chain and macro uncertainties,” MKM Managing Director Rohit Kulkarni said in a note to investors.

The company’s cloud also reported revenue growth of 45% to $ 5.54 billion. Alphabet CEO Sundar Pichai said on the earnings call the company saw 65% year-over-year growth in the number of cloud deals worth over $ 1 billion.

The strong report led at least nine Wall Street firms to raise their price target on the stock. UBS ‘Lloyd Walmsley, raised its price target to $ 3,900 from $ 3,800, representing an upside of 41.7% from Tuesday’s close.

Alphabet’s strong earnings report follows a year of outperformance. The stock surged 65% last year, beating all other Big Tech companies and more than tripling gains in the S&P 500. Alphabet on Tuesday said its board approved plans for a 20-for-1 stock split.

– CNBC’s Jennifer Elias contributed to this report.

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