Advertisers Signaling Strength Ahead Of Alphabet's Q2 Results

As part of Ju's bullish stance, the analyst conducted checks with advertisers during the second quarter, which suggest "ongoing strength" across various business segments.

The analyst also highlighted the following four factors to support his expectations for a strong quarter:

1. Ongoing ramp in mobile search traffic.
2. CPC benefits from Expanded Text Ads along with the elimination of Enhanced Campaigns.
3. Location based targeting and the potential to drive offline activity.
4. A rotation of YouTube budgets out of the first quarter into the second quarter as many advertisers put a hold to spending late in the first quarter.

Ju's longer-term investment thesis on Alphabet remains unchanged, based on:

• Ongoing monetization improvements in Search from product updates.
Better-than-expected contributions from non-Search segments such as YouTube, Play and Cloud.
• New monetization initiatives from Maps and Other Bets such as Waymo and Life Sciences.

Finally, the analyst boosted his fiscal 2017 full year earnings per share estimate from $41.83 to $42.22 and introduced a new end-of-2018 price target of $1,350.

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