Keith McCullough discussed key takeaways on Alphabet’s latest earnings report after the company reported ad revenue that missed analysts’ estimates.
“The expectation for Google was that they’d show an acceleration—and they didn’t,” explains Hedgeye’s CEO in this clip from The Macro Show. “This company sells advertising. As you’re entering a recession, I would just plainly expect advertising revenue demand to slow. And it did.”
“Now, you can replace that with whatever some bozo wants to tell you about their AI initiatives and believe that. At the top of the risk range, I don’t believe anything, and that’s where it’s coming from.”
“This is a really interesting setup. Trend for Google is 143. The risk range is 139 to 153. So, there’s a rising probability that Google is going to break trend. That’s a meaningful callout. What would be the catalyst for it not to break trend? A reacceleration in advertising revenue growth. Because all they did on AI was increase capex growth.”
Watch the full clip above.
