Another Strong Quarter for Alphabet
We view shares as fairly valued today, and are raising our fair value estimate.
Alphabet generated $27.8 billion in total revenue, equivalent to a 24% year-over-year growth, in the third quarter. Google’s advertising revenue, grew 21% year over year to $24.1 billion, which represented 87% of total revenue. Our positive takeaway from Google’s ad numbers is that different forms of engagement or interaction with Google’s ad inventory sold are increasing, indicated by the 6% sequential growth and the 47% year-over-year growth in paid clicks during the quarter. However, cost-per-click remains depressed (18% year over year during the quarter), although it rose sequentially.
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