Google, Gillis, Director discussed on Bloomberg Markets


Point three percent here so investors a little bit concerned about the growth story at Google let's chat with calling Gillis he's a director research Chatham road partners based in New York City complex much for joining us what was your take away from this global numbers last night so you know you see the stock trading down and when you look at the results you just have to frame it in the perspective that this was a a company that was priced to perfection from results seventeen point three percent revenue growth it was a little bit lower than what people are looking for so that's why we're seeing the pull back the earnings beat was also driven by lower than expected tax rates so the quality the earnings beat is not that high the stock is pulling back but you know bear in mind if touched a lifetime high the just a few days ago yeah well touching a lifetime high is all the other big tech companies that hasn't stopped them for continuing to to rally and in and out there there's a question of advertising dollars and the fact that Google is perhaps losing share to some of its competitors do you think that that's sort of an accurate take away from that the earnings that we got yesterday you know what I would look at is one of the areas for growth for Google right and if you keep in mind that this is a company that has nine products with over a billion users each android chrome **** drive map search the play store photos and YouTube there's ample opportunity for them to continue to keep their market share and to continue to drive monetization right seeing the use of numbers for the first time that was wonderful right the new CEO give us more data and insight into some of the future growth areas for the company and we can touch on that a little bit but the key thing is you look at alphabet as a whole there are easily identifiable easily identifiable opportunities for forward growth so the calling you mention kind of the new disclosure for the company they broke out for the first time revenue for you too and also for the cloud both big businesses big growth numbers what do you take away from the numbers that you're able to see that they disclose last night yeah I'm very positive you know in terms of you to write that they reported fifteen point one five billion dollars in twenty nineteen that's gross about thirty six percent from the prior year and it's more than doubled or about doubled from twenty seventeen so that's a really sizeable business the key thing remember about you to visit the monetization level per user is still very low I so there's going to be plenty of room for them to continue to drive monetization they talked about that on the earnings call particularly direct response advertising right now you too tense issue more towards brand advertising so that's going to be a gray area and then Google cloud that they they touched on that that group fifty three percent and twenty nineteen including going fifteen three thirty three percent in the fourth quarter its best quarter in history so this is an area where they gonna be tripling the size of their sales force continuing to invest both head count and capital expenditures and it's relatively small compared to a W. S. us about four times which is the Amazon web services business about four times Google cloud but Google has the ability to build this infrastructure at scale and I believe that they're going to be a material player and specials all right what's your target then for alphabet shares considering the fact that right now they are down more than three percent right so it you know you you want to bear in mind that you know they've had a great run and twenty nineteen but you could easily see something around the sixteen hundred dollar level coming up by the end of the year just to sort of get some perspective right now over at fourteen thirty three and ten cents it just sort of looking ahead to Twitter would be expecting tomorrow I I guess Thursday when they when they report a yeah right so we get the consumer tech companies right we get Twitter on Thursday we get Spotify and snap also this week so as a business right I don't love it I mean you know we talked about the nine products that Google has with over billion users yeah for Twitter we're gonna hope to see that monthly daily active users to break a hundred and fifty million was around a hundred and forty five million in the prior quarter they've had problems with their tech ad platform that had some glitches there are likely going to run into the same issue some of these other companies have cited in terms of seasonality in Q. one both with the the stronger US dollar impacting growth rates so expectations are are low right the stock is literally about the exact same spot where it was a year ago so this is one of those names that has not run if they can you know they they tend to put a little bit of EPS upside on the on the bottom line and we'll see what they can do in the revenue you know people are expecting somewhere around the mid point of guidance which should be below ten percent growth so expectations are low for the stock but you're probably speaking I don't have a high outlook for all right thank you so much for being with us calling Gillis director of research at Chatham road partners talking about what to expect from this Twitter earnings an alphabet I'd definitely getting a little bit beaten up today little beaten up and this this is a bit of an exaggeration during had a great ride and I'm sure if Colin is correct it will continue to run but it really does raise a question about the competition between tech companies you know is there just as such as secular growth in some of these prices like cloud yeah that it can support all of them which is what we side of his or with Microsoft and EW es with Amazon and plus a coming up or to be talking about the high about marketing just fixed income markets generally we're seeing very much risk I moved there the record for a monthly total bond issuance globally junk bond issuance for January was set last month right now it's head toward a daily.

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