Search engine giant reports record profit and revenue on $66 billion in advertising revenue

Topline

Google parent Alphabet beat Wall Street expectations in its third-quarter earnings report on Tuesday, the first domino to fall in a crowded week for big tech company earnings.

Important facts

Important background

Alphabet shares have actually underperformed the S&P 500 over the past 12 months, rising 37% over that period compared to the benchmark index's 40%. At 96%, it is worse than digital advertising rival Meta and cloud computing competitor Amazon with 44%. Factors weighing on Alphabet's stock price include concerns about global antitrust investigations and the negative impact on profits of aggressive spending in the artificial intelligence arms race. Alphabet shares fell 8% in the three days after reporting second-quarter earnings, despite beating analysts' sales and profit estimates. According to market research firm eMarketer, Google has about 25% of the global digital advertising market and generates about twice as much digital advertising revenue as its competitor Meta, the parent company of Facebook and Instagram.

What you should pay attention to

Fellow West Coast tech giants Amazon, Apple, Meta and Microsoft will report third-quarter results after markets close on Wednesday and Thursday in a busy week for big tech companies. These five companies account for approximately $11 trillion, or 21%, of the S&P 500's total market cap of $52 trillion, which in turn exerts an outsized influence on the overall performance of the stock market.