Mixed numbers arrive from the quarterly results of two of the largest companies in the world, Alphabet And Teslawhich are inevitably important indicators for their reference sectors.
The first, Google’s parent company, has exceeded analysts’ estimatesits revenue and profit in the second quarter was boosted by digital advertising sales and cloud computing services, but not by YouTube advertising revenue.
The second, founded by Elon Musk, recorded the lower profit margin in more than five years and missed Wall Street profit targets in the second quarter as it struggles to cut prices to revive demand and cope with rising spending on artificial intelligence projects.
Alphabet’s Results
Alphabet closed the second quarter with a Net income up 28.6% to $23.62 billion, beating analysts’ estimates of $22.9 billion (according to LSEG data). total revenue rose 14% to $84.74 billion, compared to analysts’ consensus estimates of $84.19 billion.
“Our strong performance this quarter highlights continued strength in search and momentum in cloud,” said CEO Sundar Pichai “We are innovating at every level of the AI stack. Our long-standing leadership in infrastructure and internal research teams position us well as the technology evolves and as we pursue the many opportunities ahead.”
Sales of advertising in the division YouTube rose 13% to $8.67 billion (though that was less than the $8.93 billion analysts had expected, according to StreetAccount data). Revenue from cloud computing services rose 28.8% to $10.35 billion, beating the $10.16 billion expected.
“We achieved revenue of $85 billion, up 14% year over year, driven by search and cloud, which surpassed $10 billion in quarterly revenue and $1 billion in operating income for the first time,” commented CFO Ruth Porat “As we invest to support our largest growth opportunities, we remain committed to building investment capacity with our ongoing work to sustainably reengineer our cost base.”
Tesla’s results
Tesla closed the second quarter with a Net income of $1.48 billion, compared to $2.70 billion a year ago (-45%), with adjusted earnings of 52 cents per share that missed the Wall Street consensus of 62 cents (according to LSEG data).
The company has recorded a revenues of $25.50 billion for the quarter, slightly higher than last year (+2%) and analysts’ expectations. Regulatory Credit Sales (traditional automakers buying credits from Tesla to meet regulatory goals for producing clean vehicles) nearly tripled to a record $890 million.
Tesla recorded a automotive gross marginexcluding regulatory credits, of 14.6% in the second quarter, versus estimates of 16.29% (according to Visible Alpha data).
CEO Elon Musk said during a call with analysts that the potential removal of support for electric vehicles by US presidential candidate Donald Trump would hurt other automakers more than Tesla: “It would be devastating to our competitors and it would hurt Tesla a little bit, but in the long run it would probably help Tesla, in my opinion.”
Additionally, Musk said that Tesla has postponed the presentation of its product Robotaxi to Oct. 10 from Aug. 8 to make some major changes. The company said it is on track to produce new vehicles, including more affordable models, in the first half of 2025.
