Alphabet bulls will 'sleep well at night with this quarter,' says Wedbush's Dan Ives

Alphabet also announcing an additional $70 billion buyback. Joining us now to discuss is Dan Ives of Wedbush Securities. Dan, I know you were expecting good things here. I don’t know if it’s more exciting to talk about Google Cloud turning in this 9 1/2 billion plus revenue number or YouTube continuing to be strong. But the names in advertising reporting today, Alphabet and Snap performing better than Meta did. Look, I mean this is 1/4 that they should frame and put in, in the Louvre because if you look across the board from a search perspective, from YouTube, then you get Cloud, some of the parts and my colleague and I, Scott Dev. But we think this could be 30 to $40 per share incremental to Google’s valuation. There is nothing in here that I view as a negative. This is the Bulls are going to sleep well at night with this quarter. Let’s hold on just a SEC. Dan, Let’s go back to Deirdre Bosa, who’s got more on Alphabet D Hey, John, I just got off the phone with CFOCIO and President Ruth Porat. I asked her about what they’re seeing in terms of ads and generative AI queries. She said that they’re encouraged with what they’re seeing in testing. They’re pleased with the ongoing strength and resilience in search. She pointed to that search ads number beat and she’s also said she’s excited about what generative AI can add to the user experience. On that dividend, she said it further strengthens their overall capital return program and capital allocation framework remains the same. They continue to invest aggressively in the business. And finally on that cloud growth, I know you were just talking about it, she said this they’re seeing increasing contribution from AI solutions and the results reflect broad strength across industries. She also mentioned that Google Workspace was driven by an increase in average revenue per seat. She was also asked about the CFO question, when are they going to find her replacement? She had no comment there. All right. For now, she’s got multiple jobs. Dee, thank you. Dan, back to you on some of this. Ruth Pora mentioning AI there, but contrasting with meta. Is it possible that Google’s under investing in AI if investors aren’t mad at how much they’re spending compared to the reaction to meta yesterday? Look, I think it’s a, it’s a star changed to what you saw, you know 24 hours ago. But it comes down to they have a gold mine of AI engineers and data and now they’re starting to monetize it clearly six months ago, nine months ago, backwards against the wall. But this is really, this is a new Google. I mean you’re seeing massive, not just from an investment perspective, but the growths there and this could be next 6 to 9 months. What really starts to a gold mine situation for them on AI, it’s not just Microsoft, but in this AI revolution, Google is going to be a qui player. The fact that you now have Meta paying a dividend, you have Microsoft paying a dividend, I know that’s been going on for a while. You have Alphabet paying a dividend. I mean is this going to force the hands of the other mega cap tech companies that are already highly profitable to do something similar? And I guess just as importantly, when you see some of these companies initiate these dividends, does it actually widen the investor base? Morgan, that’s a great question. I think it’s taking a page out of Apple’s playbook. You know, if you look back over the years, these companies, they’re generating more cash in some countries and that’s not going to stop. And what it’s doing here is from a capital allocation perspective, they’re still going to be aggressive an MA dividends buyback. These are the smart moves and I think that’s why we are just in the early stages of this next tech bull market. You look at these numbers, I think it’s just showing the monetization of AI cloud is actually accelerating. Unless you have a telescope, it’s hard to find a recession. I think it’s just Amazon left, Morgan. Yeah, I think you’re right. Yeah. And then I mean if you want to. Yeah, I guess so that says that. Listen, I know you don’t cover SNAP. We’re seeing huge move in those shares, Dan and we’re talking about a little bit earlier, but you know it does speak to some of these earnings we’ve gotten in the last say 24 hours, 25 hours. The fact that digital advertising is, is strong. You’re seeing increasing green shoots where that is concerned. What are the read through to some of the other companies we haven’t heard from yet? Yeah, I mean we did a survey you know over the last month at Webb Bush and that’s exactly what it showed. I mean we were seeing not just green shoes, I think actually a significant rebound that’s not priced in to what we’re seeing in terms of the whole broader space. This is just the beginning of this digital advertising rebound and that even though enterprise been strong cloud that is not participated that’s going to be another missing piece of the puzzle that what I believe we’re going to just see a massively strong Tech earnings season tonight. It’s a pound the table moment for tech relative to 24 hours ago. Little white knuckles from the meta spending like a 1980’s rock star in AI. But where’s that money going to Microsoft, Google. Amazon. Dan, how do you connect the dots here with the macro? Because we’re just wringing our hands some people anyway, as the market was opening over that GDP read. But there’s so much indication that consumers are continuing to spend and that advertisers are at least spending to benefit from that. Yeah, John, I think that’s what’s really starting to happen is that we’re seeing this rebound digital advertising. And despite even some of the the GDP numbers, I can tell you from an enterprise perspective, I mean this is something that reminds me of 1995, not 1999, because we’re in a fourth industrial revolution and the beneficiaries are tech. And now the 2nd, 3rd, 4th derivatives of this AI revolution we’re going to see across software, infrastructure, consumer, enterprise. It’s just started. This is a get out the popcorn moment to where I think we’re going in tech.