Alphabet (Nasdaq: Goog) (Nasdaq: Googl) Earnings Q1 (April 24) were reported yesterday, and investors of the stock market liked what they saw. As I write, the price of Alphabet shares will open by more than 5% higher later.

However, even after this reflection, it would still be about 18% lower than its peak at the beginning of February. As a result, I think so S&P 500 The technological juggernaut remains underestimated and it is worth considering.

Let’s assume the numbers to see why the price of the owner of Google is set to the march higher.

Very impressive quarter

Since Chatgpt appeared on stage at the end of 2022, investors were worried about the consequences for the Google search industry (the final cash cow Alphabet). If people began to utilize chatbots to find things (and maybe one day shopping online), the whole business model would be threatened.

This is because advertisers prefer to go where the eyeballs are located, not where they were (Annex A: long -term falling ITV Action price).

To be straightforward, I was also worried about this risk. But we just don’t see any evidence of interference resulting from generative artificial intelligence in the company’s financial results. In fact, on the contrary.

In Q1, revenues from year to year increased by 12% –Lub 14% in a fixed currency-to USD 90.2 billion. For those who have a result, this is an equivalent revenues worth USD 1 billion per day!

There was forceful progress throughout the company, with Google search engine, YouTube ads, Google subscriptions, platforms and devices, and a cloud division ensuring double -digit growth rates. Despite the weakness of the network segment, general advertising revenues increased by 8.5% to USD 66.9 billion

The profit per share (EPS) was USD 2.81, much higher than expected $ 2.01, because unrealized profits from private investment (commonly considered spacex) increased. The rocket company Elona Muska was valued at around USD 350 billion at the turn of the year.

The General Director of Sundar Pichai commented: “The AI ​​review goes very well with over 1.5 billion users per month and we are excited to an early positive reaction to AI mode [chat-style AI]. There is a lot more … Our diverse, full approach to AI is still crucial for our development. “

Huge redemption

The Management Board also approved a 5% dividend escalate and an additional action redemption program that is worth USD 70 billion! This will escalate previous huge redemptions and accounts for about 74% 95.3 billion USD Alphabet in cash and equivalent.

Looking at the quote, the purchase makes sense. At the moment, the price for a forward to profit (p/e) is around 19. This is the cheapest of the so -called magnificent seven groups of technical shares.

Risk

Alphabet supplies do not appear without risk. One of them is a potential economic slowdown, which could harm her basic advertising activity.

Meanwhile, it is expected that she and Shein, which have invested in Western marketing, spend less because duty -free shipments to the USA on packages costing less than USD 800 will end next month.

Finally, there is a risk that the Google Search Empire may still be broken by regulatory authorities. If this happened, it can destroy valuable synergies in various ads, data and the development of artificial intelligence.

Still fantastic value

Nevertheless, I think that this technical magazine is significantly underestimated and it is worth taking a closer look.

It seems that the company becomes stronger, while its amazing data storage gives him huge advantages in the coming AI age.