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Motley Fool Hidden Gems Investing

Big Tech's Big Miss

Motley Fool Hidden Gems Investing

The Motley Fool

Investing, Business

4.33.1K Ratings

🗓️ 22 April 2016

⏱️ 39 minutes

🧾️ Download transcript

Summary

Alphabet, Microsoft, and Netflix slip. McDonald's surprises. And Under Armour rises. Plus, CNBC's Becky Quick previews the annual Berkshire Hathaway meeting.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Everybody needs money. That's why they call it money.

0:07.0

From full global headquarters, this is Motley Fool Money.

0:19.0

It's the Motley Fool Money Radio Show. I'm Chris Hone.

0:21.0

Joining me in studio this week for Million Dollar Portfolio, Jason Moser and Matt Argus Singer

0:25.0

and for Motley Fool Pro and Options Jeff Fisher. Good to see you as always, gentlemen.

0:29.0

Hey Chris.

0:30.0

Earnings Paloza is underway. We will get to the latest results. CNBC hosts Becky Quick is our guest this week

0:36.0

and as always we're giving inside look at the stocks on our radar.

0:39.0

But we begin with two of the biggest names in technology, Alphabet and Microsoft.

0:44.0

Let's start with Alphabet. First quarter profits coming in lower than expected as investments in new projects are on the rise.

0:52.0

Maddie, I thought CFO Ruth Porad, I thought she was brought in to keep those moonshots in line. What's going on?

0:57.0

I'm searching or actually Googling even for anything that's bad with these results.

1:02.0

Yes, they did miss estimates for revenue earnings very slightly. But look at the results.

1:08.0

You have 17% growth in revenue, more than 20 billion in revenue. Let's put that 20 billion in perspective, quarterly revenue for Google overall.

1:16.0

That's in a 20% growth in operating profits. Steady growth in the core, Google Business, mostly advertising, 31% operating margin there.

1:25.0

And like last quarter they broke out the other bet segment, which includes fiber, nest, calico, the life sciences division, Google X.

1:33.0

And growth there was over 100% just keeping mining accounts for less than 1% of the revenue.

1:38.0

So really a lot of great things happening with Alphabet.

1:42.0

And I just think right now you're paying about 22 times earnings for the business, forward earnings for this year.

1:49.0

With all the optionality, the core business, there's a lot to like about Google at the price right now.

1:55.0

But somebody doesn't like what's happening because this stock is down 5% on Friday.

1:59.0

Well, into that point though, I think that this is a company you want to pay attention to what management says they're going to do versus what Wall Street maybe is expecting because they don't really play that game.

...

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