Meta in focus after strong report by Alphabet boosts confidence

Magnite

02/02/2022 11:00

By Nivedita Balu and Danielle Kaye
    Feb 2 (Reuters) - The holidays were a gift to Alphabet Inc's
 GOOGL.O  Google, quarterly results showed. Next up: Facebook
owner Meta Platforms Inc  FB.O .
    Alphabet's internet advertising, cloud computing and
hardware businesses helped the Google owner soundly beat Wall
Street targets for the holiday quarter, sending shares up as
much as 9% in after-hours trading.  urn:newsml:reuters.com:*:nL1N2UD002
    Brian Wieser, global president of business intelligence, at
the ad-buying giant GroupM, said Alphabet's results reinforce
that the advertising industry as a whole is in a strong
position, despite changes by Apple Inc  AAPL.O  that prevent
advertisers from tracking iPhone and iPad users without their
consent. That has been a concern for social media companies
including Meta and Snap Inc  SNAP.N .
    Unlike the previous quarter, during which marketers low on
product and tech industry privacy changes led to lost sales,
Google did not note any particular challenges this time around.
    "It sets up well going into Meta Platform's earnings," after
the market close on Wednesday, said Gene Munster of investment
firm Loup Ventures.
    Alphabet's results drove a rally across internet advertising
companies. Shares of Trade Desk Inc  TTD.O , Magnite Inc
 MGNI.O , PubMatic Inc  PUBM.O  and several more companies that
both compete and work with Google all rose in after hours
trading late Tuesday.
    Recent revenue beats by Alphabet, Apple and others in the
tech industry come amid concerns that software and equipment
makers alike cannot hold on to gains in usage from earlier in
the pandemic. In a generally jittery market, as inflation kicks
in, shares fell last month.
    Still, "When you look at markets, when the big companies are
doing well, you know it's hard to say that there's a problem
with the economy," said Paul McCarthy, president at investment
firm Kisco Capital.
    In the fourth quarter, Alphabet's advertising revenue rose
32.5% to $61.2 billion, $4 billion above Wall Street targets,
according to Refinitiv data.
    Microchip maker Advanced Micro Devices Inc  AMD.O  also
posted strong results on Tuesday for the just-ended quarter. AMD
projected 2022 revenue above expectations, driving its shares up
as much as 11% in after-hours trading.
    But with further inflation looming, Sophie Lund-Yates,
equity analyst at Hargreaves Lansdown, cautioned that shares of
tech companies are "unlikely to have seen the worst of the
pain."

 (Reporting by Danielle Kaye, Nivedita Balu and Paresh Dave;
editing by Peter Henderson and Richard Pullin)
 ((danielle.kaye@thomsonreuters.com;))