It’s not been a rosy year for the world’s most popular search engine. Google has underperformed against its tech peers and notably the Nasdaq 100, where it gained about 15% vs. the index’s 32% return in 2020.
Although the COVID-19 pandemic disrupted business activities around major global economic hubs, Google had failed to be relatively impressive on the average.
To date, the stock is finding it difficult to break the $1600 resistance level and it’s not showing upside strength like other tech peers that include Facebook, Apple, Amazon, and even Microsoft.
It’s not surprising that its recent earnings coming from its core business, Google Search failed to excite investors, which is the most important contributor to revenues, as it took a hit from COVID-19, with sales down -2% YoY in Q2.
The technology juggernaut is the only FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks with revenues down year-over-year, although its earnings trend remains solid.
Given that the stock has failed to break the critical resistance level as the share price dropped from its 52 weeks high of $1,597.72 price level, and remains the least choice among the FAANG stocks.
Nairametrics expects a pullback in the stock price to the $1,550 support level in the mid-term, except it ramps up revenues in its advertising and hardware segments.
Recall Nairametrics some weeks ago, gave insights on why Stock traders had not been relatively bullish on the stock, due to growing concern on Google’s inability to raise its revenue from advertising was partly responsible for the unimpressive performance in its share price.
Quick fact: Google LLC is an American multinational tech juggernaut that handles Internet-related products and services which include a search engine, cloud computing online advertising technologies, software, and hardware.
It is a subsidiary of Alphabet company. It presently has a valuation of over $1 trillion and at the time this report was drafted traded at $1,580.
However, taking a critical look at the company’s other streams of income, Nairametrics observed notably that Google cloud and Youtube produced an impressive performance, growing 43% and 6%, respectively thereby giving the bulls a strong case for the stock to remain above the $1,500 support level.
For Google to change its present status quo the stock would have to break the $1,600 resistance level, before its next earnings results and probably start monetizing its payment services.
Presently, Nairametrics is not bullish on Google’s stock price, as its peers in recent times offer better returns on capital. That said Nairametrics would be a strong buyer of the stock on any breach below the $1,500 support level.
4 Cryptos you might make money from in November
Bitcoin remains the most liquid crypto, and has been attracting high institutional interest.
Billions of dollars flow daily into the crypto-verse, as investors try to get more value from their invested buck.
Nairametrics decided to highlight crypto assets that are likely to make investors and traders smile to the bank.
The first pick is ZCash (ZEC). It’s on Nairametrics’ top pick, on the basis that it will be undergoing its first halving this November. This means that its inflation level would be reduced to about 13%.
It also means that the inflation correction due to Zcash’s halving may likely give the temporary bump.
Ethereum makes the list based on the fact that investors have increased their buying pressure on the second most valuable crypto by market value, coupled with the bias that the number of Ethereum $ETH Number of Addresses Holding 0.1+ coins just reached an ATH of 3,590,870.
Previous ATH of 3,590,669 was observed on 30 October, 2020.
Previous ATH of 3,590,669 was observed on 30 October 2020
— glassnode alerts (@glassnodealerts) October 31, 2020
The third pick is Cardano (ADA), on sentiments that it’s heading towards its smart contract release, sometime in November, leading to a significant amount of applications built on Cardano by this time 2021. This means that more developers will see it as an attractive medium for building their desired apps.
And of course, the most valuable crypto in the crypto-verse, Bitcoin. This pick is for obvious reasons: it remains the most liquid crypto, and has been attracting high institutional interest, most recently from PayPal, which means that it might just be a matter of time before the crypto asset becomes the number one choice asset for safe haven.
Also, miners are earning fees at record highs as recent reports from Glassnode, a crypto analytic firm, reveals. Bitcoin miners’ revenue from fees (1d MA) just reached a 2-year high of 0.296.
The previous 2-year high of 0.295 was observed on 30 October, 2020.
Previous 2-year high of 0.295 was observed on 30 October 2020
— glassnode alerts (@glassnodealerts) October 31, 2020
Disclaimer: Nairametrics, with the help of other leading financial data providers, through their price assessments performance in percentage terms, ranked the financial assets at specific categories.
The objective is to give the needed insight of top-performing financial assets around the world, and should not be seen as a piece of investment advice or guide, as Nairametrics advises one to seek the services of a certified financial advisor for such services.
Therefore, Nairametrics doesn’t bear any responsibility for any trading loss you might incur as a result of using this data.
Zoom is 3 times bigger than Nigeria’s Stock Market Capitalization
Zoom sported a market valuation of $131 billion, compared to the Nigerian Stock market with a value standing at $42.1 billion.
The world’s fastest-growing video conferencing service company, Zoom, has seen its market valuation rocket past $130 billion—more than 3 times the value of the Nigerian Stock Exchange.
Zoom has attracted high demand growth for its service, especially since COVID-19 changed the way the world works. As one of the pioneers of modern work-from-home tools, millions of organizations around the world have adopted the application as their preferred communication tool in the workplace, particularly video conferencing.
What we know: At the time of drafting this report, Zoom sported a market valuation of $131 billion, compared to the Nigerian Stock market with a value presently standing at $42.1 billion (N16 trillion), using the official exchange rate of N380 to $1.
- Zoom’s enviable performance began in early 2020, when it printed a market capitalization of just $19 billion. While Zoom posted $1.35 billion in revenue over the past 12 months, the Nigerian Stocks bourse, in comparison, printed a market capitalization of $39.1 Billion (N14.87 trillion) at the end of January, according to data obtained from Nairalytics (financial data arm of Nairametrics).
- The bullish run got intensified for the tech company, particularly in Q2 that ended August 31, when it posted an impressive earning result of $663.5 million in revenue (far beating analysts’ prediction of $500.5 million)—and it still firing on all cylinders.
- Such gains seen in Zoom’s stock price have added so much wealth to its investors, that Zoom founder, Eric Yuan, has seen his own fortune rise more than 551% year to date, with a valuation put at about $23.2 billion, according to data seen from Bloomberg Billionaire Index.
Eric Yuan is presently the chairman and CEO of Zoom Video Communications, the world’s biggest provider of video conferencing software to the business.
On the other hand, Nigerian stocks also defied expectations and produced positive returns, with every month in the third quarter, printing positive returns as buying pressure increased across the market spectrum. The Nigerian stock market’s performance was triggered by the Industrial Index emerging as the biggest gainer, up by 8.14% followed by the most liquid index, banking index (10.08%), and the Consumer Index printing (2.74%), still market capitalization hovered below $40 billion.
Zoom has now boosted its revenue forecasts to $690 million for the present quarter (through the end of October), and also increased its financial guidance for the full fiscal year, through Jan 2021, to about $2.4 billion in revenue, up from $623 million for the year through January 2020, as it takes into account the demand for remote work solutions for businesses reaching a record high.
The exponential valuation seen in the world’s biggest video company had been enhanced by the fact that a significant amount of businesses and individuals now work remotely, on the bias of the world’s most disruptive biological pathogen COVID-19’s continued spread, triggering global investors to increase their buying pressure on the American communications technology company, which is barely less 10 years old in operation.
Bottom-line: Covid-19 may have caused a lot of damage to the global economy since it was declared a pandemic in the first quarter of the year, but not for remote working app companies like Zoom, Slack, and Microsoft Teams.
- The US stock markets assign significant value to companies that can grow exponentially, as they believe these are companies that will continue to dominate the future of work.
- Just like US tech stocks, stocks on the Nigerian Stock Exchange have also gained significantly in the latter part of this year.
- However, rather than gaining from higher revenues growth, they have relied on Meffynomics (lower interest rate in a high inflation economy) to attract portfolio inflows from local investors.
Google fired up, post strong advertising growth
Google fired up on all cylinders as high as 9% in after-hours trading as it smashed many stock analysts’ predictions.
Google parent company Alphabet was fired up on all cylinders. It gained as much as 9% in after-hours trading, after it smashed many stock analysts’ predictions for both revenue and earnings in its Q3 results, showing strong growth in ad revenue amid the ravaging COVID-19 virus attacks.
What you should know
Highlights of Q3 results
- Earnings per share: $16.40 vs $11.29 expected.
- Revenue: $46.17 billion vs $42.90 billion expected.
- Google Cloud: $3.44 billion vs. $3.32 billion expected.
- YouTube ads: $5.04 billion vs. $4.39 billion expected.
- Traffic acquisition costs (TAC): $8.17 billion vs. $7.66 billion expected.
At the time of drafting this report, the world’s tech powerhouse, Google had a valuation of over a trillion-dollar and was trading at $1,567.24 with its Price/Earning Ratio standing at 32.91.
- However, Google’s parent company disclosed its revenue from “Other Bets,” which includes its subsidiaries outside of Google like the self-driving car company Waymo and Life Sciences business – Verily, brought in $178 million compared to $155 million a year ago.
- Meanwhile, Other Bets showed an operating loss of $1.10 billion, up from $941 million a year ago.
What they are saying
The top brass of Google including its CEO, Sundar Pichai, and Wall street’s Ruth Porat, CFO of Google, gave valuable insights on why the most popular search engine company performed extremely well.
“We had a strong quarter, consistent with the broader online environment,” said Sundar Pichai, Chief Executive Officer of Alphabet and Google.
“It’s also a testament to the deep investments we’ve made in AI and other technologies, to deliver services that people turn to for help, in moments big and small.
Ruth Porat, Chief Financial Officer of Alphabet and Google, said,
“Total revenues of $46.2 billion in the third quarter reflect broad-based growth led by an increase in advertiser spend in Search and YouTube, as well as continued strength in Google Cloud and Play.
“We remain focused on making the right investments to support long-term sustainable value.”