I look at Google (GOOGL 0.43%) and Facebook (META -0.33%) earnings in today's video. Both these stocks shattered earnings, which sent their stock prices up. Here I share two reasons why they can still keep growing.
Two reasons Google can still grow:
- YouTube's ad revenue grew roughly 48% year over year and now makes up more than 13% of Google advertising revenue and 10.8% of total revenue. YouTube continues to provide new content creation tools to keep viewers and bring new ones to its platform. For example, YouTube Shorts now has 6.5 billion daily views, up 85% quarter over quarter.
- Google Cloud is currently an unprofitable business, but its margins are improving as its revenue increases. Once this segment becomes profitable, it will be another flow of cash for Google.
Two reasons Facebook can still grow:
- Facebook's virtual reality headset can be a strong player in future revenue for the company. Even though Facebook's "other revenue" segment makes roughly 2.8% of total revenue, it did see a vast year-over-year growth of 146%. Facebook has also mentioned it will increase expenses this year to focus on consumer hardware.
- In the past few days, we have seen a few services release earnings. On average most saw a decrease in monthly active users. Facebook, on the other hand, has seen both year-over-year and quarter-over-quarter growth of family daily active people. This growth shows the stickiness of its platforms and why advertisers will continue to use its services.
Click the video below for my full thoughts.
*Stock Prices used were the closing prices of April 28, 2021. The video was published on April 28, 2021.