Alphabet Rises Following Earnings Beat As Revenue Jumps 34%

Shares of Alphabet (GOOGL, GOOG) are on the rise on Wednesday after the company reported big beats on both its top and bottom lines for its first quarter. Google's parent said revenue rose 34% from a year earlier and announced a new $50B stock buyback. Following the news, several Wall Street analysts raised their price targets on the stock, with Piper Sandler analyst Thomas Champion calling the quarter "impressive" and his peer at Oppenheimer arguing that Alphabet is well-positioned to benefit from reopening tailwinds.

RESULTS: Alphabet reported first-quarter earnings per share of $26.29 and revenue of $55.3B, both above consensus of $15.82 and $51.7B, respectively. The company reported first-quarter Google advertising revenue of $44.68B versus $33.76B a year ago, YouTube ads revenue of $6.0B versus $4.0B in the same quarter of the prior year, Google Cloud revenue of $4.05B versus $2.78B a year ago, and Traffic Acquisition Costs of $9.71B versus $7.45B a year ago.

Along with its earnings release on Tuesday, Alphabet reported that on April 23, its board of directors authorized the company to repurchase up to an additional $50.0B of its Class C capital stock. The repurchases are expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.

'IMPRESSIVE' FIRST QUARTER: Piper Sandler analyst Thomas Champion raised the firm's price target on Alphabet to $2,635 from $2,250 and reiterated an Overweight rating on the shares after the company reported an "impressive" first quarter print. Core search and YouTube numbers were strong, while cloud grew 46% year-over-year, the analyst said.

Barclays analyst Ross Sandler also raised the firm's price target on Alphabet to $3,000 from $2,500 and kept an Overweight rating on the shares. The analyst highlighted that Search and YouTube continue to see a significant share shift from other advertising channels, as evidenced by accelerating growth on both a one-year and two-year stacked basis, "putting to bed any concerns about Google's high penetration."

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