Instant Reaction: Alphabet Beats Sales Estimates

Bloomberg Audio Studios, podcasts, radio news. The headlines third quarter 0:00:09.200 --> 0:00:12.520 revenue x tax seventy point fifty five billion. That's a beat. 0:00:12.600 --> 0:00:15.200 Seventy two point eighty eight was the estimate. Third quarter 0:00:15.320 --> 0:00:19.159 Google Cloud revenue also beat over eleven billion dollars. The 0:00:19.160 --> 0:00:20.960 street estimate was about ten point eight ten. 0:00:21.120 --> 0:00:24.400 All right, let's I think we should bring in Man Deep. 0:00:24.440 --> 0:00:26.119 So I think we should definitely bring He's. 0:00:26.040 --> 0:00:29.560 Been watching these numbers very closely. He joins us here 0:00:29.720 --> 0:00:34.280 in the Bloomberg Interactive Brokers studio. A beat pretty much 0:00:34.440 --> 0:00:38.360 across the board, Man Deep, you cover this company and 0:00:38.360 --> 0:00:39.559 many others. We're going to get to some of the 0:00:39.560 --> 0:00:43.760 others in just a second. For Bloomberg Intelligence. What's really 0:00:43.760 --> 0:00:44.440 sticks out to you? 0:00:44.680 --> 0:00:47.640 I mean, the Google Cloud beat is quite impressive because 0:00:47.680 --> 0:00:51.200 the thirty five percent growth rate is a nice acceleration. 0:00:51.360 --> 0:00:54.120 I mean, we are talking about thirty percent being the bogie. 0:00:54.840 --> 0:00:57.000 They really hit it out of the park when it 0:00:57.040 --> 0:00:58.240 comes to the Google Cloud. 0:00:58.440 --> 0:01:00.280 So what does that tell you about their client. 0:01:00.960 --> 0:01:05.559 That the clients are deploying their AI workloads on Google Cloud. Remember, 0:01:05.600 --> 0:01:08.240 Google Cloud is the third when it comes to the 0:01:08.319 --> 0:01:09.880 cloud ranking. 0:01:10.000 --> 0:01:11.840 You've got Aws, Azure. 0:01:11.800 --> 0:01:15.240 Azure and Google Cloud has an und rate of forty 0:01:15.240 --> 0:01:18.640 four billion. Now with this print, Azure is about eighty 0:01:18.680 --> 0:01:21.680 billion and AWS is one hundred and five billion. So 0:01:22.280 --> 0:01:25.200 I think what you will see is Google Cloud growing 0:01:25.319 --> 0:01:28.319 much faster than the other two. Most likely Microsoft will 0:01:28.319 --> 0:01:31.480 be around thirty percent. AWS is more twenty percent. So 0:01:31.520 --> 0:01:34.280 clearly that thirty five percent growth rate is very impressive, 0:01:34.800 --> 0:01:38.440 and the cloud profitability actually was much better than expected, 0:01:38.680 --> 0:01:40.880 which is why you see the operating margin bead here. 0:01:41.000 --> 0:01:45.399 How low was the bar going into this report for Alphabet. 0:01:44.800 --> 0:01:46.800 It was I think low in the sense that the 0:01:46.840 --> 0:01:50.240 overall top line road of thirteen percent was quite low, 0:01:50.600 --> 0:01:53.640 and they beat on. You know, the certain numbers were 0:01:53.640 --> 0:01:56.440 in line. The YouTube ad numbers were in line. The 0:01:56.480 --> 0:02:00.920 YouTube subscriptions continues to be the standout. They keep delivering 0:02:01.000 --> 0:02:04.760 quarter after quarter, and now YouTube plus cloud is one 0:02:04.800 --> 0:02:07.480 hundred billion dollar rundread business. They guide it to that 0:02:07.800 --> 0:02:10.040 and they are showing it in the in the sprint. 0:02:10.000 --> 0:02:12.400 And YouTube alone is a fifty billion dollar business over 0:02:12.400 --> 0:02:14.919 the last four quarters, according to the release from the company. 0:02:15.200 --> 0:02:18.160 I would say if you add the subscriptions, yeah, to 0:02:18.280 --> 0:02:22.520 the ads, it's closer to sixty simply because they bundle 0:02:22.600 --> 0:02:25.320 YouTube subscriptions in the other segment and they've got some 0:02:25.440 --> 0:02:28.560 other revenue in there as well. So that's why that 0:02:28.680 --> 0:02:32.880 subscription number continues to be very impressive, the YouTube premium 0:02:32.960 --> 0:02:35.959 and the YouTube TV. Yeah, and most likely it is 0:02:36.000 --> 0:02:36.680 margin increased. 0:02:36.760 --> 0:02:39.560 A quick reminder, Google bought YouTube back in two thousand 0:02:39.560 --> 0:02:42.080 and six for one point sixty five billion dollars. 0:02:41.960 --> 0:02:44.880 Which is pretty amazing. Listen, we watch a lot of YouTube, 0:02:45.800 --> 0:02:46.760 two different programs. 0:02:46.800 --> 0:02:47.839 We're on YouTube right now. 0:02:47.960 --> 0:02:48.720 We are on YouTube. 0:02:48.800 --> 0:02:50.960 You want everybody she's not watching you tube. 0:02:50.919 --> 0:02:53.320 I'm not watching it. You know, it's interesting. We did 0:02:53.320 --> 0:02:56.440 some reporting kicked off our broadcast couple of hours ago 0:02:56.560 --> 0:03:02.880 about the overhang, the anti trust action scrutiny over where 0:03:02.880 --> 0:03:05.480 their alphabet's dominant market share and Internet search is at 0:03:05.520 --> 0:03:09.239 a risk as other players in AI come in. How 0:03:09.280 --> 0:03:13.560 do you kind of factor those overhanging elements in. 0:03:13.760 --> 0:03:16.000 Yeah, Look, there is no doubt if you're a regulator 0:03:16.080 --> 0:03:18.799 right now and looking at the search market, there's more 0:03:18.840 --> 0:03:23.359 competition this chat GPT, there are other large anguage players 0:03:23.400 --> 0:03:26.120 and Tropic even Meta is talking about getting into search. 0:03:26.360 --> 0:03:29.080 So there is definitely perplexity being another one there is 0:03:29.120 --> 0:03:32.400 more competition for sure. Now, the thing that's impressed me 0:03:32.480 --> 0:03:36.080 this quarter was they continue to execute on search. So 0:03:36.200 --> 0:03:39.360 even though the search volumes are going down, they still 0:03:39.400 --> 0:03:41.600 had an inline forty nine point one. 0:03:41.840 --> 0:03:43.160 Is very amazing. 0:03:43.200 --> 0:03:44.800 Why are search volumes going down? 0:03:45.360 --> 0:03:48.880 Because if chat GPT is taking some of your traffic 0:03:49.000 --> 0:03:52.520 for informational queries, that Google search volume, I would say, 0:03:52.640 --> 0:03:55.720 is going down. But the ROI on their ad spend 0:03:55.800 --> 0:03:58.000 is so high that they can make it up on 0:03:58.080 --> 0:04:00.800 the ad pricing site. So even involves are going down, 0:04:01.280 --> 0:04:03.520 ad pricing continues to be stronger. 0:04:03.680 --> 0:04:05.280 Why because they're the dominant player. 0:04:05.360 --> 0:04:08.320 They are the dominant player, and they have the best 0:04:08.440 --> 0:04:10.880 kind of mode when it comes to the ads stack 0:04:11.240 --> 0:04:15.680 around keyword searches. There's no better a platform for you know, 0:04:15.840 --> 0:04:20.080 navigational searches or transactional searches. If you're an e commerce player, 0:04:20.080 --> 0:04:22.760 you have to advertise YouTube. There's no way out of it. 0:04:23.560 --> 0:04:26.159 So what's the question that you would want to know 0:04:26.200 --> 0:04:27.640 from them on the earnings call? I mean, the stacks 0:04:27.680 --> 0:04:29.880 know up four point two percent in the aftermarket, so 0:04:29.960 --> 0:04:31.159 the momentum just building. 0:04:31.279 --> 0:04:33.560 They give you so little in terms of guidance that 0:04:33.640 --> 0:04:36.080 I almost want to, you know, plead the management to 0:04:36.640 --> 0:04:39.920 give us more details around their CAPEX plans like every 0:04:39.960 --> 0:04:41.520 other company gives us so much more. 0:04:41.640 --> 0:04:43.880 Well, this is the thing that going into this week 0:04:44.040 --> 0:04:45.800 right with all of these guys reporting, and what it 0:04:45.800 --> 0:04:48.080 would tell us about the AI spend. What did you 0:04:48.120 --> 0:04:50.599 what so far have you heard about or are you 0:04:50.640 --> 0:04:51.760 feeling like you're going I mean. 0:04:51.600 --> 0:04:55.159 If the cloud number was a blowout, which it looks 0:04:55.240 --> 0:04:58.240 like in this print, then clearly you know the spend 0:04:58.279 --> 0:05:01.960 on AI is translated into cloud revenue, and so to 0:05:02.040 --> 0:05:06.440 my mind, I think that AI Kapex investment is showing 0:05:06.560 --> 0:05:08.680 up in the cloud revenue. And that's why I want 0:05:08.720 --> 0:05:12.120 to know the Capex guide. Are they overspending because at 0:05:12.120 --> 0:05:14.720 this pace, you know, with the fifty billion dollar capex, 0:05:15.040 --> 0:05:18.080 they're way lower than Microsoft at around eighty billion. So 0:05:18.160 --> 0:05:20.000 that's why that Capex guide is very important. 0:05:20.160 --> 0:05:21.800 Is it apples to apples when it comes to the 0:05:21.839 --> 0:05:25.359 way these companies are investing. Can we can we really say, okay, 0:05:25.360 --> 0:05:30.200 the Microsoft AI spend or Microsoft capex we can compare 0:05:30.200 --> 0:05:32.839 it directly to Alphabet. 0:05:32.560 --> 0:05:34.800 You can, and Alphabet has got a different set of 0:05:34.880 --> 0:05:39.240 businesses along with AI and cloud. They've got weimo that's 0:05:39.240 --> 0:05:41.680 a big investment. I mean that that's a big call 0:05:41.720 --> 0:05:45.680 option on the company overall. That revenue line could be huge, 0:05:45.680 --> 0:05:48.279 and they are investing on the Vemo side. But look, 0:05:48.320 --> 0:05:52.039 when it comes to Capex, it's all about training of 0:05:52.360 --> 0:05:55.760 large angwid models. Can you maintain the lead when it 0:05:55.800 --> 0:06:00.560 comes to you know, Microsoft OpenAI partnership and where stacks 0:06:00.640 --> 0:06:01.280 up against them? 0:06:01.520 --> 0:06:03.960 Where are we in the race? You said can If 0:06:03.960 --> 0:06:05.840 they can maintain the lead, it has me where are 0:06:05.839 --> 0:06:06.440 we in the race? 0:06:06.640 --> 0:06:09.400 I mean, some would argue the open ai model is 0:06:09.440 --> 0:06:12.360 still better for some of the large angrid model. 0:06:12.200 --> 0:06:14.440 Use and open Ai is using Microsoft Azer. 0:06:14.560 --> 0:06:18.080 They are using Microsoft Azor. So from that perspective, Google 0:06:18.160 --> 0:06:20.640 is playing catch up. But they have been releasing a 0:06:20.680 --> 0:06:23.680 lot more products lately than they were before. And that's 0:06:23.680 --> 0:06:27.040 where I think owning the chips. Remember Google has their 0:06:27.120 --> 0:06:29.880 own chips when it comes to training these models. They're 0:06:29.880 --> 0:06:33.160 not even reliant on Nvidia for a large portion of training. 0:06:33.360 --> 0:06:36.360 They do that in house, and that could the reason 0:06:36.400 --> 0:06:39.400 why their Capex spend could be much lower than Microsoft. 0:06:39.440 --> 0:06:42.360 Can we ask you? We've got Reddit? While we've got you. 0:06:42.400 --> 0:06:45.680 Reddit is surging in the aftermarket. It's up about seventeen percent. 0:06:45.760 --> 0:06:49.599 Also out with their earnings, c's signal strong holiday quarter 0:06:49.640 --> 0:06:52.720 to come fourth quarter revenue three hundred and eighty five 0:06:52.760 --> 0:06:55.080 to four hundred million. The street estimate was three fifty 0:06:55.120 --> 0:06:58.400 six point two. So the outlook is upbeat. What do 0:06:58.440 --> 0:06:59.240 we need to know here? 0:06:59.400 --> 0:07:02.560 I mean, this just ipeoed at the perfect time. And 0:07:02.600 --> 0:07:04.920 look when it comes to Reddit, all that timing. They 0:07:04.960 --> 0:07:09.200 are one of the beneficiaries of llms, you know, implementing search, 0:07:09.520 --> 0:07:12.160 because where do you drive that traffic when you show 0:07:12.200 --> 0:07:14.720 a result in an LLLM. A lot of that traffic 0:07:14.760 --> 0:07:16.760 goes to Reddit. And that's why a lot of the 0:07:16.800 --> 0:07:19.240 Google traffic is now going to Reddit, A lot of 0:07:19.240 --> 0:07:19.800 the chat che. 0:07:20.120 --> 0:07:22.000 I guess say, when I search in different things, like 0:07:22.040 --> 0:07:23.000 a lot of things goes. 0:07:22.840 --> 0:07:25.320 Back go back to it. I also like, I spend 0:07:25.320 --> 0:07:27.600 more time on Reddit than any other single you know, 0:07:27.680 --> 0:07:30.840 quote unquote social media site like it's and I was 0:07:30.880 --> 0:07:32.040 such a late adopter. 0:07:31.840 --> 0:07:34.480 To Yeah, yeah, right, I mean, think of what these 0:07:34.600 --> 0:07:37.800 lllms are trained on. They're trained on. Reddit data is 0:07:37.880 --> 0:07:41.200 one of the corpus that is common across all the lllms, 0:07:41.400 --> 0:07:44.520 and that's why when you search for something, it takes 0:07:44.600 --> 0:07:46.520 you back to one of the Reddit posts, which is. 0:07:46.520 --> 0:07:49.040 Kind of what they said right when they were ipoing, 0:07:49.120 --> 0:07:51.000 right that this was going to be what was so 0:07:51.120 --> 0:07:53.000 valuable about it, And it's playing out that way. 0:07:53.080 --> 0:07:55.520 It is they ipeoed at the perfect time. I mean, 0:07:55.560 --> 0:07:57.160 that acceleration is just amazing. 0:07:57.320 --> 0:07:59.600 Can we ask you about Snap too? Snap is up 0:07:59.640 --> 0:08:03.040 about ten eleven percent here in the aftermarket, So another 0:08:03.080 --> 0:08:04.560 one that's surging. Let's go to the. 0:08:04.560 --> 0:08:06.720 Outlook, thirty six percent so far this year. 0:08:06.800 --> 0:08:08.800 Yeah, okay, so perspective. Sorry about that. I was getting 0:08:08.800 --> 0:08:12.280 a little exciting fourth quarter revenue one in one point 0:08:12.320 --> 0:08:14.560 five to one point five to one to one point 0:08:14.560 --> 0:08:16.440 five six billion. The estimate on the street is one 0:08:16.440 --> 0:08:18.320 point five six billion, so it sounds like that's a 0:08:18.320 --> 0:08:21.120 little bit of a range. So they projecting slower holiday 0:08:21.160 --> 0:08:23.480 advertising sales. Why are they up well? 0:08:23.800 --> 0:08:26.360 In the case of Snap, like Tim said, you know, 0:08:26.800 --> 0:08:29.480 they are up twenty percent one quarter, then down twenty 0:08:29.520 --> 0:08:32.640 and in this case, I think overall what you're seeing 0:08:32.720 --> 0:08:37.479 is the lower interest rates now I mean we have obviously, Yeah, 0:08:37.600 --> 0:08:39.520 it's it helps the add companies. 0:08:39.200 --> 0:08:41.200 There are buying back I should say, up to half 0:08:41.200 --> 0:08:41.640 a billion. 0:08:42.120 --> 0:08:44.160 Yeah, I don't know what to make of it, because 0:08:44.200 --> 0:08:47.280 for a company of Snap size, doing a buyback right 0:08:47.320 --> 0:08:49.800 now is not the best use of their cash. But 0:08:50.720 --> 0:08:52.120 maybe the investors like that. 0:08:52.160 --> 0:08:53.600 What should they be doing with their cash? 0:08:53.920 --> 0:08:58.040 They should be deploying generative AI. Every platform right now 0:08:58.120 --> 0:09:01.680 should be looking to add more feess that helps you 0:09:01.720 --> 0:09:05.160 know their engagement. And generative AI is what every social 0:09:05.240 --> 0:09:07.800 media platform is doing. Look at Meta, They're using it 0:09:07.840 --> 0:09:08.559 at scale. 0:09:08.960 --> 0:09:11.000 What an interesting kind of drop of earnings and we're 0:09:11.000 --> 0:09:12.760 focusing on a lot of these kind of I feel 0:09:12.800 --> 0:09:16.440 like high tech interesting. Google Alphabet up still three point 0:09:16.440 --> 0:09:18.600 four percent in the aftermarket. Does it tell you anything 0:09:18.679 --> 0:09:23.520 potentially about what's to come from Meta? From Amazon, from Microsoft? 0:09:23.559 --> 0:09:25.560 Is there anything that we can infer here or now? 0:09:25.720 --> 0:09:27.920 Yeah? I think Meta. For Meta, the bar is slightly 0:09:28.000 --> 0:09:31.200 higher twenty percent growth rates, so I think they will 0:09:31.240 --> 0:09:34.120 beat and raised, but clearly the bar is higher. And 0:09:34.200 --> 0:09:37.280 for Microsoft, the Cloud number will blow out. I mean, 0:09:37.480 --> 0:09:40.520 if Google Cloud did so well, I wouldn't be surprised 0:09:40.520 --> 0:09:43.160 if Microsoft's growth is around that thirty four to thirty 0:09:43.160 --> 0:09:44.160 five percent as well. 0:09:44.240 --> 0:09:46.880 All right, Reddit shares up seventeen and a half percent 0:09:46.960 --> 0:09:48.959 right now, I know I know, I know. I mean, 0:09:48.960 --> 0:09:51.720 look we're talking, you know, and hundreds of millions of dollars, 0:09:51.760 --> 0:09:55.400 not billions of dollars. Here, last question, what dos What 0:09:55.440 --> 0:09:57.640 does all of this mean? Man Deep? For what we 0:09:57.679 --> 0:10:00.880 get tomorrow and Thursday when we hear Amazon and Apple? 0:10:01.280 --> 0:10:03.640 I mean for Amazon and Apple, I think. 0:10:03.600 --> 0:10:04.720 They're meta platforms too. 0:10:04.800 --> 0:10:07.520 Yeah, Look, meta I think should do well. I mean, 0:10:08.160 --> 0:10:11.679 ads continue to be strong, and they should probably beat 0:10:11.760 --> 0:10:15.319 and raise and their large angrid model LAMA is a 0:10:15.360 --> 0:10:21.080 big strategic advantage. So in the case of Apple or Amazon, 0:10:21.200 --> 0:10:25.040 they're very different. I think with Amazon, the AWS business 0:10:25.160 --> 0:10:29.120 is growing slower than Microsoft and Google, so that may 0:10:29.200 --> 0:10:32.480 weigh on them. And for Apple it's about China. I mean, 0:10:32.520 --> 0:10:35.440 if they can counter that China risk, I think they 0:10:35.440 --> 0:10:36.240 are a well position. 0:10:36.400 --> 0:10:37.800 All right, We're gonna leave it on that note, Man 0:10:37.840 --> 0:10:42.079 Deep saying the best Bloomberg intelligence breaking down those alphabet earnings. 0:10:42.080 --> 0:10:43.720 Do you want to mention too a couple of others 0:10:43.720 --> 0:10:46.400 that have crossed. AMD is down more than five percent 0:10:46.480 --> 0:10:50.960 here in the aftermarket. They're forecast falling short, suggesting a 0:10:51.000 --> 0:10:54.960 slower pace of AI growth advanced micro devices, giving a 0:10:55.000 --> 0:10:57.559 lackluster revenue forecast for the current period, so there is 0:10:57.600 --> 0:11:02.640 some concerns that it's aises are growing more slowly than anticipated. 0:11:02.720 --> 0:11:04.640 And then Chippotle also at with results. 0:11:04.960 --> 0:11:08.880 All right, shares of Chipotle ticker CMG in the after 0:11:08.960 --> 0:11:11.360 hours right now, I'm just waiting for the. 0:11:11.280 --> 0:11:14.880 Turn down about seven percent liter the after market. Their 0:11:14.960 --> 0:11:18.000 sales falling short of investor expectations as well. 0:11:18.320 --> 0:11:21.240 Yeah, for sales, look at this. The measure of locations 0:11:21.240 --> 0:11:23.760 open for at least thirteen months rose six percent, was 0:11:23.800 --> 0:11:26.480 below the average analyst estimate of six point four percent. 0:11:27.520 --> 0:11:30.120 The stocks advanced so far thirty two percent this year, 0:11:30.200 --> 0:11:32.320 so it's done better than the S and P five hundred. 0:11:32.840 --> 0:11:35.280 The company did maintain its full year view that same 0:11:35.320 --> 0:11:37.319 store sales will rise in the mid to high single 0:11:37.360 --> 0:11:37.960 digit range. 0:11:38.000 --> 0:11:40.360 All right, let's go back to though alphabet obviously the 0:11:40.360 --> 0:11:42.320 big one and the one that we've been really focusing 0:11:42.360 --> 0:11:45.360 on again, up about four percent here in the after market. 0:11:45.400 --> 0:11:48.440 Caroline Hyde is here with us in studio, co host 0:11:48.440 --> 0:11:51.920 of Bloomberg Technology on Bloomberg TV eleven am Wall Street Time. 0:11:52.000 --> 0:11:52.520 Every day. 0:11:52.840 --> 0:11:54.679 You're welcome, You're welcome. You guys are going to be 0:11:54.720 --> 0:11:55.560 talking a lot about this. 0:11:56.040 --> 0:11:58.920 What do you make oh, the cloud. Cloud revenue up 0:11:58.960 --> 0:12:00.760 thirty five percent. I had you call it out when 0:12:00.800 --> 0:12:03.760 they broke after the closing bell. And really that is 0:12:04.240 --> 0:12:07.880 where the metal roots the road, really, doesn't it, Because 0:12:07.920 --> 0:12:10.280 this is where the investment, the capex of over thirteen 0:12:10.320 --> 0:12:13.400 billion dollars is vindicated. Because they're able to grow revenue 0:12:13.440 --> 0:12:16.440 to such a significant extent. Why are they winning new clients? 0:12:16.440 --> 0:12:18.319 Why are they getting the startups that are ex Google 0:12:18.400 --> 0:12:20.199 is coming to them for their compute power, for their 0:12:20.240 --> 0:12:23.640 services and their software, because they've got AI prowess that's 0:12:23.679 --> 0:12:26.360 able to win yet more customers, more money, and more revenue. 0:12:26.480 --> 0:12:30.240 Better AI prowess than Microsoft, who's in second place when 0:12:30.240 --> 0:12:33.720 it comes to the cloud, or AWS who has the 0:12:33.800 --> 0:12:34.920 crown for first place. 0:12:35.200 --> 0:12:37.439 Many would say that the need for computers so vast 0:12:37.600 --> 0:12:40.240 that you go wherever you can take it. But ultimately, 0:12:40.280 --> 0:12:42.680 I think it's about whether they've got this suppliability and 0:12:42.720 --> 0:12:44.440 whether they are able to cater to it. I think 0:12:44.600 --> 0:12:47.480 people aren't. People do feel that even though from a 0:12:47.559 --> 0:12:51.240 narrative perspective, in the consumer's mindset, maybe we suddenly thought 0:12:51.320 --> 0:12:54.560 that open AI had run away with artificial intelligence generative 0:12:54.600 --> 0:12:57.200 AI and leading the charge I'm sorry. DeepMind has been 0:12:57.200 --> 0:13:01.120 there since twenty ten with Google as an an extraordinary 0:13:01.200 --> 0:13:04.720 lab that has sophisticated AI prowess, and I think therefore 0:13:04.760 --> 0:13:07.040 they're able to start showing that even if the narrative 0:13:07.120 --> 0:13:09.440 moved on them, the actual reality is they're locking in 0:13:09.720 --> 0:13:13.080 customers and they're able to generate their own revenue from this, 0:13:13.400 --> 0:13:16.120 and that's why they're able to also drive up profitability. 0:13:16.120 --> 0:13:18.120 They're managing to be cost focused at the same time 0:13:18.120 --> 0:13:19.080 as driving up revenue. 0:13:19.120 --> 0:13:21.880 You know, we talk about you know that they're advertising business, right, 0:13:21.920 --> 0:13:24.200 it's a massive one. It's a big one, but there's 0:13:24.240 --> 0:13:26.880 a maturation aspect of it, right, and so it's important 0:13:26.920 --> 0:13:29.400 to see the cloud business continue to grow or the 0:13:29.440 --> 0:13:31.520 YouTube business continue to grow. I mean, these are important 0:13:31.559 --> 0:13:32.559 to see these aspects. 0:13:32.760 --> 0:13:34.640 It is, and actually we manage to live up to 0:13:34.679 --> 0:13:36.880 expectations when it came to the juggernaut that is the 0:13:36.920 --> 0:13:42.200 ad business YouTube considerable addition there. And look, this is 0:13:42.200 --> 0:13:44.880 where people have been worried about generative AI encroaching on 0:13:44.920 --> 0:13:47.160 that part of the business model too. Would suddenly I 0:13:47.280 --> 0:13:50.360 not go to Google, Would I instead go to chatchypt? 0:13:50.559 --> 0:13:53.800 Would I be using perplexity people aren't, and my way, 0:13:53.920 --> 0:13:56.800 I love Google AI overviews. I think it's really easy 0:13:56.800 --> 0:13:59.280 and it keeps me using what I'm used to using 0:13:59.520 --> 0:14:00.480 right exactly. 0:14:00.559 --> 0:14:03.440 This is so remarkable to me. YouTube's total ads and 0:14:03.480 --> 0:14:07.640 subscription revenues surpass fifty billion dollars over the past four 0:14:07.720 --> 0:14:10.600 quarters for the first time. I was marveling thinking back 0:14:10.640 --> 0:14:12.880 to two thousand and six when YouTube was, yeah, an 0:14:12.920 --> 0:14:15.640 independent company. Google bought it for what one point six 0:14:15.720 --> 0:14:17.199 billion dollars or something. 0:14:17.200 --> 0:14:20.160 And now they can move from freemium to premium and 0:14:20.200 --> 0:14:23.480 suddenly we're all still completely using addicted it. They've got 0:14:23.480 --> 0:14:25.800 live sports, and no wonder that we're returning to YouTube 0:14:25.800 --> 0:14:28.400 time and time again. I mean, they own market share 0:14:28.400 --> 0:14:30.960 when it comes to our eyeballs, and they can start 0:14:31.040 --> 0:14:33.200 charging us for it. So they're able to contribute more 0:14:33.200 --> 0:14:35.400 than eight billion dollars in terms of overall revenue for 0:14:35.440 --> 0:14:39.240 the business. And it's more about us paying for it 0:14:39.280 --> 0:14:41.600 as consumers than it is about advertising. At the moment. 0:14:41.600 --> 0:14:43.600 People will worry that might run a little very light, 0:14:43.720 --> 0:14:44.920 but they're able to get us to pay. 0:14:45.000 --> 0:14:47.880 Caroline, I think about you and ed and your coverage, 0:14:48.840 --> 0:14:51.200 you know, going into tomorrow, what's kind of top of 0:14:51.240 --> 0:14:53.920 mind for you when it comes to Alphabet and what 0:14:54.080 --> 0:14:55.520 it maybe says to us about some of the other 0:14:55.560 --> 0:14:58.200 big megacaps to report, which it's a massive week. 0:14:58.360 --> 0:15:00.960 What does it signal for Avatar housing resilience for the 0:15:01.080 --> 0:15:03.240 likes of Meta, for the likes of other players, But 0:15:03.280 --> 0:15:05.160 what does it mean in terms of Nvidia? We don't 0:15:05.200 --> 0:15:06.960 we have to wait until November. 0:15:06.600 --> 0:15:07.840 To get in video amazing. 0:15:08.240 --> 0:15:10.240 All of the hyperscales are going to be coming this week, 0:15:10.280 --> 0:15:12.120 and we want to know that that thirteen billion dollars 0:15:12.160 --> 0:15:14.320 is still there. What willston our pitch I'd talk about 0:15:14.480 --> 0:15:17.400 in terms of future capex spend, but also he's got 0:15:17.400 --> 0:15:21.560 to take questions on anti anti competitive, anti trust issues. 0:15:21.720 --> 0:15:24.240 That's the overhang on the stock. We can see that 0:15:24.320 --> 0:15:27.000 the numbers are there, but what about the future business 0:15:27.000 --> 0:15:29.920 model and how he has to basically pivot and change 0:15:30.280 --> 0:15:33.000 to be able to take the pressure off himself from 0:15:33.040 --> 0:15:35.320 the DOJ here in the United States, the FTC and 0:15:35.360 --> 0:15:36.160 over in Europe too. 0:15:36.240 --> 0:15:38.680 Yeah, it's kind of how we started off a couple 0:15:38.680 --> 0:15:40.600 of hours ago. Like the overhang of this one. 0:15:40.640 --> 0:15:42.800 I'm looking at chairs of Meta Platforms. They were hired 0:15:42.840 --> 0:15:45.520 today in the trade, but also hired by eight tenths 0:15:45.520 --> 0:15:48.080 of one percent in the after hours that company reporting 0:15:48.120 --> 0:15:49.320 tomorrow aftermarket. 0:15:49.360 --> 0:15:51.440 All Right, grit steffis always thank you, Thank you, Joe 0:15:51.600 --> 0:15:54.440 Day for you really appreciate it. Caroline Hyde, of course, 0:15:54.520 --> 0:15:58.080 co host of Blueberg Technology on Bloomberg TV with Ed Ludlows. 0:15:58.080 --> 0:16:00.400 So catch them at eleven am Wall Street Time everyday, 0:16:00.440 --> 0:16:01.160 Monday through Friday.