Alphabet, the parent firm of Google, reported profits that exceeded estimates and nearly doubled in 2021, putting to rest fears of a global slowdown following a particularly profitable holiday season.
Google is still at the hub of online activity, with products like its search engine, ad marketplace, and YouTube video platform giving it global reach.
In the fourth quarter of 2021, the tech behemoth earned $20.6 billion on revenue that increased by 32% to $75 billion, bringing the year’s profit to $76 billion. That was nearly double the projected profit of $40 billion in 2020.
Sundar Pichai, CEO of Alphabet, credited the company’s success to “strong growth in our advertising business… a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly.”
Alphabet’s excellent results follow Apple’s record revenue from the pandemic era.
“We are slowly seeing a changing narrative take shape for the tech sector as the bullish…guidance by tech stalwarts Microsoft and Apple last week set a positive tone for the Street heading into this week,” Wedbush analysts said ahead of Alphabet’s earnings release.
Despite a global semiconductor shortage and fluctuating pandemic effects that have pulled down other big tech companies, Apple posted record $124 billion quarterly revenue on Thursday.
Even while declining growth shadowed corporations such as lockdown lifestyle champ Netflix, the results exceeded expectations, sending optimistic signals.
Last month, the streaming behemoth saw its market capitalization drop significantly after forecasting only 2.5 million new subscribers in the first quarter, its slowest growth since 2010 and a massive drop from the 55 million subscribers it had over the previous two years as Covid-19 transformed daily life.
Google’s fortunes were considerably different, with Alphabet announcing that its board had approved a 20-to-1 stock split, making shares more accessible to small investors. In after-market dealings on Tuesday, the stock gained more than 7% to $2,995.
“Our investments have helped us drive this growth by delivering the services that people, our partners and businesses need, and we continue to invest in long-term opportunities,” Ruth Porat, CFO of Alphabet, said in the earnings report.