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Gene Munster Breaks Down Alphabet's Overlooked Businesses

Gene Munster Breaks Down Alphabet's Overlooked Businesses

Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) reported fourth quarter results that included an earnings miss and a revenue beat. The quarter is notable because it included a lot of commentary on Alphabet's lesser known and discussed business units, according to former Wall Street analyst turned venture capitalist Gene Munster.

Artificial Intelligence

Google's head Sundar Pichai continues to convey the message to investors that artificial intelligence is "essential" to the company's long-term vision and will be a key component of its products and services, Munster wrote in a blog post.


Google's cloud unit is now a $1 billion per quarter business and is the fastest-growing major public cloud provider, Munster wrote. The unit's momentum is coming from the company's efforts to be enterprise scale ready and the business should continue to see growth moving forward.


Hardware is becoming "increasingly important" to Google as total hardware shipments doubled in the quarter. For the time being the company appears to be more focused on the user experience rather than monetization, which implies an ad-free experience for now. Google Home's superior artificial intelligence capabilities will result in it taking market share from rival devices like Amazon's Alexa.


Details related to timing on fleet deployment within the Waymo unit was "danced around" during Alphabet's conference call. Nevertheless, management demonstrated some "excitement" and the unit should be the first to bring a widespread fleet online.

Price Action

Shares of Alphabet were trading lower by 5 percent Friday.

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