Market Overview

With Alphabet's Earnings On Deck, Consider Long- Vs. Short-Term Investing Strategies

With Alphabet's Earnings On Deck, Consider Long- Vs. Short-Term Investing Strategies

Netflix, Inc. (NASDAQ: NFLX) was the first member of the "FANG" group to report its earnings, and the company didn't disappoint. Google/Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) is on deck to report its earnings after Monday's market close, but investors hoping for the stock to repeat Netflix's surge higher may want to reconsider.

Owning Alphabet's stock into earnings is risky as so much of its total revenue is derived on advertising, Eddy Elfenbein, editor of the Crossing Wall Street blog, said during a recent CNBC "Trading Nation" segment. Given the recent ad controversy surrounding YouTube, investors should acknowledge that a poor earnings report could result in the stock dropping "dramatically" in a short period of time.

But long-term investors shouldn't be bothered with any short-term movements in the stock, as the company is known for "making tomorrow today," Elfenbein continued. Even if "the current quarter doesn't perform" on Monday, it could be accompanied with "good news" regarding the longer-term outlook."

Investors may be in fact bracing themselves for an earnings miss as Alphabet's profit will likely be impacted by a $2.74 billion fine it received from European regulators, a separate CNBC report noted. The company has already confirmed it will book an accounting charge for the full amount in the quarter.

As such, analysts are expecting Alphabet to earn just $4.46 per share in the quarter, down from the $8.42 per share it owned in the same quarter a year ago. Also, Alphabet's investments in the "other bets" segment will also be a drag on the company as the unit's operating loss could total nearly $1 billion, RBC Capital Markets' Mark Mahaney told CNBC.

Related Links:

Netflix Wowed Investors With Its Earnings Report, Will Fellow 'FANG' Member Amazon Follow Suit?

Cramer: Ahead Of FANG Earnings, Don't 'Feel Foolish For Pulling The Trigger'

Posted-In: CNBC Earnings News Previews Legal Global Tech Media Best of Benzinga


Related Articles (GOOG + GOOGL)

View Comments and Join the Discussion!