Guest post by jbrumley. 

Google Parent Company Alphabet (GOOGL) Rallies Big On Earnings

Not only did Alphabet (GOOGL) (GOOG) post impressive earnings and revenue growth last quarter, but it impressively topped expectations.

For the quarter ending on September 30th, Alphabet earned $7.35 per share on revenue of $18.7 billion. Those figures topped analyst estimates of $7.20 per share of GOOGL and $18.54 billion in sales. And, both third quarter numbers compared favorably to Q3 of 2014, when Alphabet - when it was still Google - earned $6.35 per share on $16.52 billion worth of revenue.

The results offered encouragement to investors who had become increasingly concerned that the growing preference for mobile devices - where screen space is limited and ads are seen and clicked less - would prove to be a strong headwind for Alphabet subsidiary (and still flagship revenue producer) Google. And in some regards, that shift was trouble, in that the average cost-per-click fell 11% on a year-over-year basis. But, that decline was more than offset by the 23% increase in the sheer number of clicks Google generated during the third quarter.

And yes, mobile search revenue grew in the quarter.

CFO Ruth Porat said of the numbers, "Our Q3 results show the strength of Google's business, particularly in mobile search. With six products now having more than 1 billion users globally, we're excited about the opportunities ahead of Google, and across Alphabet."

Alphabet also announced its putting a $5.1 billion stock buyback into motion.

As for GOOGL shares, they were already near record-breaking highs, and the bullish response to Thursday evening's earnings news has taken them past a recent ceiling near $701 and well into uncharted waters. While the stock has been able to forge its way into higher highs in the past even while it was overbought, this time around may be different. Alphabet shares will open at a level that translates into a 36% gain in just three months, and leaves the stock priced at a frothy forward-looking P/E of 22.1. Even GOOGL has its limits.

GOOGL Weekly Chart