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Analyst: Google Cloud Revenue Up 85% In Q2

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Analyst: Google Cloud Revenue Up 85% In Q2

Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) shares traded lower by more than 2.5 percent on Tuesday morning after the company’s second-quarter earnings report fell short of the market’s lofty expectations. However, Google bulls have plenty to like about the company’s impressive cloud services growth.

Google reported second quarter revenue growth of 43 percent in its “other” category, which includes cloud revenue. Global Equities Research analyst Trip Chowdhry estimates that Google’s cloud-specific revenue was up 85 percent in Q2.

In a research note earlier this month, Chowdhry discussed Google’s positioning in the three-way battle for cloud supremacy with Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT).

“There are only going to be two SuperClouds — AMZN-AWS and MSFT-Azure,” Chowdhry wrote. “Google Cloud is differentiating itself on Price and Machine Learning [and] we will need to continue to monitor Google Cloud.”

While all three companies are investing heavily in data centers, Chowdhry said Google is ahead of its peers when it comes to data residency requirements.

Related Link: Microsoft's Enduring Advantage Keeps Analysts, Investors Bullish

According to Google CEO Sundar Pichai the company tripled its large cloud deals in the second quarter.

“Google Cloud Platform, GCP, continues to experience impressive growth across products, sectors and geographies,” Pichai said on Alphabet’s earnings call.

“In Q2, the number of big deals we closed worth more than half a million dollars is three times what it was last year.”

Google also hired 1,614 new employees in the second quarter, most of which will work in the cloud division.

Google may have a lot of ground to make up to overtake Amazon as the global leader in cloud services, but the head of Google’s cloud business Diane Greene said earlier this year that Google could surpass Amazon by 2022.

Latest Ratings for GOOG

DateFirmActionFromTo
Aug 2020UBSMaintainsBuy
Jul 2020Raymond JamesMaintainsOutperform
Jul 2020Deutsche BankMaintainsBuy

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