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Alphabet stock falls after hours following Q4 earnings report

Yahoo Finance Live anchors break down how Alphabet stock is trading on the heels of earnings.

Video transcript

BRAD SMITH: Let's take a look at where tech stocks are trading after earnings that just dropped for Amazon and Alphabet. Let's begin with Alphabet, parent company of Google and YouTube there. And for the revenue side, you saw that come in at a consolidated revenue level of $76.05 billion. The ex-traffic acquisition cost revenue was $63.12 billion. Earnings, earnings per share, that came in at $1.05.

And so, the company missing essentially on some of the estimates, both top and bottom line here. However, the traffic acquisition costs were just a little bit lighter than the Street had been expecting. It was expected to come in at $13.2 billion. It came in at $12.93 billion. And the margin was largely in line, just slightly outpaced by a hair on the chinny chin-chin. And so continuing to look through some of the other parts of this business.

And this is largely an ad business, let's remember. And in an environment where there is so much of the pullback right now in demand for advertising, the larger question is, where does that duopoly in digital advertising continue to hold up between a Meta Platforms and a Google if people are seeing or companies are seeing the highest conversion rates or biggest bang for their buck in that spend?

DAVE BRIGGS: What do you expect that investors, in particular, are reacting to given that number we see about 4% down?

BRAD SMITH: I think it is just the response to the environment that they've had to wade through in the most recent quarter. There was a lot of investor sentiment coming into this around whether or not that the fourth quarter would actually set the bottom for the expectations in the digital advertising market. So all that to say, is the worst behind us with regard to the demand cycle right now? And--

DAVE BRIGGS: Is that your expectation? I would assume not.

BRAD SMITH: Well, here's the differentiator for both of those companies, too. And what I just mentioned in them being a duopoly in digital advertising as well, that's where they're able to offload some of that inventory into a YouTube. They can offload that inventory for Meta Platforms into an Instagram. And so for all of them having more of the reactive marketing campaigns that are being able to take place, more conversion is what some of the marketers depend upon when they come to these platforms.

SEANA SMITH: Yeah, certainly.