Please ensure Javascript is enabled for purposes of website accessibility

These 2 Stocks Just Shattered Earnings, and They Still Have Room to Grow

By Jose Najarro - Apr 29, 2021 at 10:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Facebook and Google just showed impressive earnings results that drove their stock prices up. Here are some reasons these two stocks still have room to grow.

I look at Google (GOOGL -0.21%) and Facebook (META -0.76%) 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:

  1. 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.
  2. 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:

  1. 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.
  2. 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. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
$2,174.75 (-0.21%) $-4.51
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$160.03 (-0.76%) $-1.22
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,181.62 (-0.27%) $-5.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.