Google And Microsoft Are At War With Each Other, Which Is The Better Investment Right Now?
Alphabet shares are trading higher after the company reported better-than-expected Q2 results. GOOG/GOOGL
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00:00 Alphabet Q2 EPS coming in here at $1.44 beating the $1.34 estimate. Sales at $74.6 billion beat the $72.82 billion estimate.
00:11 And now, there were some comments in the earnings reports that I thought were pretty interesting. Of course, CFO saying that
00:18 the financial results reflected continued resilience in search with acceleration of revenue growth in both search and YouTube,
00:27 as well as momentum in cloud. We continue investing in growth. Search revenue came in at $42.62 billion, cloud revenue
00:37 totaling $8 billion, and YouTube ad revenue hitting $7.66 billion in the quarter.
00:43 Nice rip on this one. They took that. Nice rip. I'm just gonna, for the technicals, just for today, I'm going to give you
00:52 that pre-market after hours high at $132.70. But I think the more inner, I'm going to look at this a little bit longer
00:59 term. I think it's all about this hold at $130 today. I mean, that's going to be my swing level. Former high of the move,
01:06 $129.55. You're still, you know, not comfortably above, you're still above that right now. But, you know, if you're looking
01:14 for a push to $140 here, you're going to have to find a host of buyers here at $130 to support the market at $130 to build a
01:24 foundation to keep going higher. So that's that's that. That's what I'm looking at for Google in the short term. But, you
01:32 know, pretty good, man. They make a lot of money, don't they, Dennis?
01:35 23 times earnings, I believe only here. So again, you're getting a discount compared to Microsoft here. You know, the
01:44 question is, and that's the biggest question, I think this actually helped them to that, you know, if Microsoft's talking
01:49 about their, you know, AI sales growth being gradual, it doesn't sound to me like they're imminently going to murder
01:57 Google search. So, you know, that probably helps them too. And I mean, these two companies are literally at war with each
02:04 other. So it's not surprising that one, you know, they're both trying to say, I, they're both trying to, Google's trying to
02:09 protect, obviously, their monopoly on search, and Microsoft's trying to get a piece of the action. So, you know, 23 times,
02:15 it's not a cheap stock, but it's not that expensive either, especially if they can get the AI products going.
02:21 Yeah, I think at the end of the day, I'm going to go with that Google might reach new all time highs. Why am I going to go
02:27 on the limb on that? Big thing for me is I think they're going to have a huge lift in YouTube ad revenue. As you start
02:34 seeing what? Sunday ticket. I've been talking about this. This is going to be next quarter. I think this is actually
02:40 going to drive a big surprise revenue growth in YouTube. And then the ad also gets a lift.
02:48 For the football? Are you talking about?
02:49 Yes, for the football. For the change in football. I think this is massive because the truth is, there's been a lot of pent
02:57 up demand in the NFL. Because we all have wanted the Sunday ticket, but a lot of us didn't do it because it was on
03:05 DirecTV. Now we get the option to do it this year. I think you're going to see a lot of people go and get YouTube.
03:11 The DirecTV has officially lost Sunday ticket.
03:13 They still have access to it. But YouTube TV is also going to have a streaming and then you also have the direct like
03:22 the satellite option.
03:24 You know what sucks about streaming sports is the bloody delay. It sucks. And you know, because I'm like hardcore
03:32 hockey. And if you're watching streaming, my phone like starts, "Oh, what a goal!" I'm like, "What are you talking
03:39 about?" And I'm like, "Boom, 10 seconds later the goal." It's like 30 seconds, Joel. The stream is, streaming is
03:45 brutally delayed. It is. It's like 30 seconds. I mean, in some cases, it might be a little bit less, but it's like 30
03:51 seconds delayed. So I mean, if you're just sitting there, I have to shut my phone off. If I'm streaming something, I
03:57 shut my phone off because I don't want to know about the goal before I see the goal. So because somebody who's
04:02 watching, you know, old school cable, which is direct line in is always faster. So the streaming, it does suck that
04:09 it's slow. Intern saying the same thing. I know he's complained about it before too. I don't know why they can't
04:14 like figure that out. But the streaming because it's got to go up and it's got to do whatever it's got to do. It's
04:19 slower. Like satellite was always slower. You got to go up to the sky and you got to come back down.
04:23 It's latency though. It's a part of the latency to get you the quality that you're looking for. Right? So essentially
04:29 you need to create a buffer so that you can give that quality.
04:32 But what Dennis, what Mitch is mentioning here though, is like a show. So, you know, there's not touchdowns being
04:39 scored, right? The Sunday Ticket's like more of a preview show.
04:42 No, no, no, no. It's all access to games, Joel. All access to away games.
04:48 Away games. They can't be in your home network, right? Like, you know, but like, let's say for me that I'm a big
04:55 Dolphin fan and I like watching Dolphin football games. I usually have to go to the bar down the street to go watch
05:01 the game.
05:01 Because they're delayed on the streaming.
05:04 That's I would have to go down the street to actually watch that game. Or I would normally do the red zone and
05:10 that's just touchdowns. Now I can actually get Sunday Ticket.
05:14 That's going to be a big boost. Yeah.
05:16 Like I have old school digital cable, Joel.
05:19 Yeah.
05:19 I can stream so I have both. So I have old school digital cable in my office and the old school digital cable is at
05:27 least 25 to 30 seconds ahead of the stream.
05:30 Not joking, like way ahead.
05:32 It's not like five seconds or three seconds.
05:35 Yeah, it's like 30 seconds.
05:38 It's a lot.
05:40 You know, I even have a little delay in my house between two TVs, like, but it's only like a couple seconds.
05:47 Yeah, a second or two, you wouldn't care.
05:48 But I'm not joking.
05:50 It's 30 seconds.
05:51 The delay between streaming a live sporting event and watching it through old school digital cable.
05:57 A lot of people don't have old school digital cable anymore.
05:59 They've just cut the cord so they don't realize.
06:02 But that's the one benefit to old school digital cable is when you're watching a hockey game, you're getting that fast.
06:07 That fast.
06:09 All right. Now I'll do a little wrap up here for Google.
06:12 Of course, they mentioned accelerated revenue growth in both search and YouTube.
06:17 They also continued investing in growth.
06:20 They also said they had momentum in their cloud compared to Microsoft.
06:24 That's telling you devices down, a personal computing revenue down, intelligent cloud coming down.
06:32 Right. I think we know which one's doing better, at least in the short term.
06:36 It's Google right now.
06:38 We'll see if Microsoft can come back.
06:39 One other different one other thing I just want to point out between the two companies,
06:43 you know, Microsoft, you know, making that Activision, you know, deal.
06:49 I mean, they're they're looking for, you know, they're looking farther and down the line for growth.
06:55 Yeah. Yeah.
06:56 And that that was a big pickup.
06:58 So I don't know how long that's going to take to work through the pipes.
07:02 Google, you know, wasn't Google Alphabet.
07:05 What did they start Alphabet because they were going to acquire a company with every letter in the alphabet?
07:12 Wasn't that the deal?
07:13 Yeah, that was something like that.
07:14 I don't think you made that up, but let's keep going.