Alphabet Inc. releases earnings this week as big tech dominates.
The company has the same growth headwinds as other technology firms. Still, analysts are looking to the cloud platform for gains.
GOOG – Daily Chart
The price of GOOG stock is trading at a critical resistance level ahead of the earnings, and a stronger figure will propel the stock toward the $120 price level.
Google Cloud turned out to be the critical catalyst for Alphabet’s growth on the back of its strengthening cloud service offerings.
The company’s cloud offerings include Google Cloud Platform and Google Workspace. Both have been rising in adoption as the cloud computing market booms. Additional investments in infrastructure, security, data management, analytics, and AI remain major positives and continue to hint at positive momentum for GOOG.
Alphabet’s revenue growth has relied on this segment in the recent downturn, and revenues from the segment were $6.3 billion in the second quarter of 2022. The figure rose to 9% of total revenues with year-over-year growth of 35.6%.
Traders should look into the numbers and see how the stock trades around this $102.50 resistance level.
For the third quarter of 2022, the Zacks Consensus Estimate for Google Cloud revenues is pegged at $6.7 billion, suggesting growth of 34.9% from the prior year’s reported figure. A headwind for Google could be a slowdown in advertising revenues as fellow tech company SNAP saw a sell-off in its stock due to its weakest sales growth.
Tech companies have been hiring freezes and job cuts which will also factor into the earnings. Traders have been hoping that the Federal Reserve will slow its interest rate hikes, which will slow the trajectory of the US dollar. That will leave a clear winner in the tech world when the dollar pulls back and reduces foreign exchange pressures on revenues.
