Alphabet: A High-Flying Act
The sky was the limit for Alphabet last week, with the tech titan’s stock soaring 12%. The surge, largely seen on Friday, followed a well-received financial report. Alphabet also announced its initiation of a dividend payment, shedding its title as the most valuable U.S. company by market cap without a dividend program.
Google’s parent company reported a 15% revenue increase to $80.5 billion in the first quarter, surpassing analysts’ 13% projection. While a 15% growth might appear modest for a growth stock, Alphabet has now delivered five consecutive quarters of accelerating top-line expansion.
The company witnessed robust growth across various segments, notably in ad revenue, which forms a significant portion of its operations. Google Cloud stood out with an impressive 28% revenue surge and nearly quintupled operating profit, even though it constitutes just 12% of Alphabet’s revenue mix.
Image source: Getty Images.
Earnings painted an even brighter picture, skyrocketing by 57%, double the Wall Street’s 29% estimate. Despite the typically gloomy outlook on cost reductions and layoffs, investors cheered the expanding profit margins, marking a stellar performance for the company.
Alphabet managed to surpass analysts’ profit expectations by 3% to 9% for the previous four quarters, achieving an impressive 25% beat this time around. The introduction of a new dividend of $0.20 per share every three months also opens up Alphabet to a broader investor base.
The tech giant’s shareholder-friendly moves didn’t end there, with the board authorizing an additional $70 billion in share buybacks.
Tesla: Zooming Despite Financial Hurdles
Tesla revved up its stock by 14% last week, despite falling short in its earnings report. The electric vehicle manufacturer saw a 9% revenue decline and almost halved adjusted net income, missing market expectations on both fronts. Demand struggles persisted, resulting in a 9% drop in deliveries.
Cheering investors were Tesla CEO Elon Musk’s forward-looking comments on the future of its FSD autonomous-driving platform, amidst the company slashing prices on the premium service that automates driving tasks. The firm is ramping up its robotaxi initiatives and affirming plans for an imminent budget-friendly model, a move that pressured shorts despite the lackluster financial results.
Wingstop: Flying High Ahead of Earnings
Wingstop outshone the market without any fresh financial updates, with its stock climbing 10%. The fast-growing chain specializing in traditional and boneless chicken wings is set to release its latest quarterly results on Wednesday.
Investors are optimistic about Wingstop’s potential, especially considering the recent strong performance of fast-growing restaurant stocks. The chain has a track record of exceeding expectations, with significant double-digit beats in its last four reports.
With a 49% surge this year and nearly doubling in value over the past year, Wingstop has built a reputation for consistency, boasting 20 straight years of positive same-store growth, a winning formula in the volatile restaurant sector.
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Suzanne Frey, an Alphabet executive, sits on The Motley Fool’s board of directors. Rick Munarriz holds no positions in the mentioned stocks. The Motley Fool has stakes in and recommends Alphabet, Tesla, and Wingstop. For detailed disclosures, check our policy.