Alphabet (GOOG, GOOGL) shares fell Wednesday morning after the company reported its second-quarter earnings yesterday. While the Google parent company slightly beat expectations (adjusted earnings of $1.89 per share on revenue of $84.7 billion), YouTube ad revenue fell short of projections and cloud revenue beat expectations.
During an earnings conference call, Alphabet CEO Sundar Pichai commented on the tech giant’s capital expenditures (CapEx) in AI: “…the risk of underinvesting for us is far greater than the risk of overinvesting.”
Brad Erickson, an internet analyst at RBC Capital Markets, appeared on Morning Brief to comment on Alphabet’s capital spending.
“Yes, they have the balance sheet and the cash flow space. There are always concerns, and it’s a short-term issue,” Erickson said, before musing: “Is their structural return on invested capital declining? Yes, I think you could probably make that argument. But his [Pichai’s] So, over time, if this opportunity turns out to be as big as many think it is, these investments will be proven correct.”
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This post was written by Luke Carberry Morgan
See more Alphabet earnings coverage from Yahoo Finance.
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