Despite sub-par economic growth and a lack of jobs, equity markets have been surging over the past few months as investors have scooped up beaten-down equities in hopes of riding the recent trend to robust gains. No more has this been true than in the technology sector, where a variety of large companies seem poised for solid levels of growth on the back of increased demand in emerging markets and huge cash piles, which are ready to be deployed in order to create new growth opportunities.
A great example of this is with internet search giant Google
Analysts expect earnings of $6.69 per share on revenues of $5.27 billion compared to $5.13 a share in earnings on revenues of $4.39 billion in the third quarter of last year. Investors will likely focus in on three key aspects of the company's business in order to get a better picture of the company's future growth opportunities; mobile phones, DoubleClick, and YouTube. The Android operating system has been a smashing success for Google and looks to be a cash cow well into the future as well; according to BusinessWeek, the company previously has said that more than 200,000 Android devices are being activated per day. This suggests not only rapid user adoption but also ensures that Google will keep its hands on the increasingly large mobile search market, allowing the company to continue its dominance on the mobile platform as well [see Three Tech-Heavy International ETFs].
Investors will also be interested in the recent results of the company's two multi-bullion dollar acquisitions, DoubleClick and YouTube. Although YouTube is still likely to be posting a loss, the company has said that it is selling ads along almost two billion videos per week, suggesting that the division may finally become profitable in the near future, which would be great news for Google and its nearly two billion dollar investment in the video giant. Meanwhile, the $3.2 billion purchase of ad manager DoubleClick appears to be going very smoothly as virtually all of the company's top 1000 advertising clients are currently running ad campaigns on the Google Display Network. Google CEO Eric Schmidt has said that this display ad business could end up being a $10+ billion dollar business, so investors will obviously be intrigued to see if this acquisition is living up to these lofty expectations [see all the funds in the Technology Equities ETFdb Category].
Due to this earnings report, we have decided to make the First Trust Internet Index Fund
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Disclosure: No positions at time of writing, photo is courtesy of Vinhtantran.
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