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Trader's Diary

Economic calendar

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Definition of terms:
Earnings

Earnings

refer to the profits or net income generated by a company during a specific period.

  • Earnings are a measure of a company's financial performance and are often reported on a quarterly or annual basis.

  • Positive earnings indicate that a company has made a profit, while negative earnings indicate a loss.

  • Earnings can be influenced by various factors, such as revenue, expenses, taxes, and other financial activities.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Actual

Actual refers to the real or current value or result of something. In the context of IPOs, actual can refer to the actual price or number of shares sold in the IPO, as opposed to the estimated price or number of shares.

Estimate

Estimate refers to a prediction or approximation of something, such as the expected price or number of shares in an IPO. Estimates are often made by investment banks and analysts based on market demand and other factors.

Difference

Difference refers to the numerical or percentage variance between two values. In the context of IPOs, difference can refer to the variance between the estimated and actual price or number of shares sold in the IPO.

Percent

Percent refers to a fraction of 100, often used to express a proportion or rate. In the context of IPOs, percent can be used to express the difference between the estimated and actual price or number of shares sold as a percentage of the estimated value.

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IPOs

IPOs (Initial Public Offerings):

An IPO occurs when a private company sells its stock to the public for the first time to raise capital or money.

The money raised from an IPO can be used for various purposes, such as paying down debt, investing in the company's long-term health, research and development, expanding into new product lines, or purchasing fixed assets.

During the IPO process, the equity shares of private investors

convert into publicly owned shares of the new entity, and early investors may sell their stock once the company's shares begin trading.

The chief benefit of an IPO is to help the company raise money and gain access to the capital markets, allowing for expansion and increasing credibility.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Name

The name is the official name of the company whose shares are being offered in the IPO.

Exchange

The exchange is the stock exchange where the company's shares are listed and traded. Examples of stock exchanges include the New York Stock Exchange (NYSE) and the Nasdaq.

Currency

The currency is the type of currency in which the company's shares are priced and traded. This can vary depending on the country and stock exchange where the company is listed.

Start date

The start date is the date on which the company's shares begin trading on the stock exchange after the IPO.

Offer price

The offer price is the price at which the company's shares are initially offered to the public in the IPO. This price is set by the company and its underwriters based on market demand and other factors.

Shares

Shares refer to the units of ownership in the company that are being offered to the public in the IPO. These shares can be bought and sold on the stock exchange after the IPO.

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Splits

Splits (Stock Splits):

A stock split occurs when a company increases the number of its outstanding shares of stock to boost the stock's liquidity.

In a stock split, the number of shares outstanding increases by a specific multiple, but the total dollar value of all shares remains the same.

Companies often choose to split their stock to lower its trading price to a more comfortable range for most investors and increase the liquidity of trading in its shares.

For example, if a company decides to split its stock 2-for-1, the number of shares outstanding would double, while the share price would be halved.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Split date

The split date refers to the date on which the stock split takes effect. It is the date when the new shares resulting from the split are distributed to existing shareholders. Optionable

Optionable refers to whether the stock is eligible to be used as an underlying asset for options contracts. If a stock is optionable, it means that options can be traded on that stock.

Old shares

Old shares refer to the existing shares of a company before a stock split takes place. These are the shares that will be exchanged for the new shares resulting from the split.

New shares

New shares are the additional shares that are issued to existing shareholders as a result of a stock split. The number of new shares is determined by the split ratio, such as 2-for-1 or 3-for-2, where shareholders receive a certain number of new shares for each old share they own.

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Positive Outlook on Google's Impressive Quarter

Date: 24.7.2024

Yesterday was an exceptional day, especially for those invested in Alphabet Inc (NASDAQ: GOOG), the parent company of Google, as the company reported second-quarter earnings that not only beat Wall Street expectations but also showed significant progress in areas poised for further growth. On that basis, the results have significantly boosted my confidence in the tech giant's trajectory. [1]

Earnings Overview

 

Google reported second-quarter sales of $71.36 billion, excluding payouts to partners, surpassing the anticipated $70.7 billion. This impressive revenue was spearheaded by robust demand for its cloud computing services and sustained strength in search engine advertising. Net income also exceeded expectations at $1.89 per share against the forecasted $1.84, reaffirming Google’s profitability even amidst ambitious expansions[1].*

 

Strategic AI Investments Paying Off

 

Despite the high costs associated with integrating AI across its various platforms, including Gmail, Google Docs, and the search engine itself, the quarterly results indicate that these investments are beginning to bear fruit. This aligns with my optimistic view of Google's AI advancements as not just cost centres but as significant growth drivers. The company's proactive approach, even under the looming competition from OpenAI and Microsoft, appears to be a strategic win.

 

Cloud Computing Segment: A Hidden Gem

 

The real highlight for me in this quarter’s results was the performance of Google Cloud, which reported a profit of $1.17 billion, exceeding analysts’ expectations. This sector's profitability after years of investments underscores Google's potential to secure a larger share of the booming cloud market, challenging rivals like Amazon and Microsoft. Google Cloud's growth is particularly promising, given its appeal to AI startups and its increasingly integral role in providing AI infrastructure solutions.

 

Advertising and Search: Old Reliatives Remain Strong

 

The resilience of Google's advertising and search segments was also on full display, generating $48.5 billion in search advertising revenue alone. This dominance in search is crucial as it continues to be Google's cash cow, funding other more speculative ventures. Such a financial backbone supports my optimistic stance on the company's ability to innovate without jeopardizing its core revenue streams.

 

Concerns and Forward-Looking Statements

 

While Alphabet’s shares experienced some fluctuations in after-hours trading, likely due to higher-than-expected capital expenditures of $13.2 billion, I view this as a necessary step in bolstering its AI and computing capabilities.* Ruth Porat, Alphabet’s Chief Investment Officer, echoed sentiments of strong AI and cloud growth prospects in the earnings call, reinforcing my positive outlook.

 

Conclusion

 

Today’s earnings report from Alphabet was a testament to the company's robust fundamental health and its strategic positioning for future growth. As a trader, I am reassured by Google's performance and potential, particularly in AI and cloud computing. I remain bullish on Alphabet’s shares, seeing the current market reactions as short-term adjustments rather than reflections of long-term value. The forward momentum in AI and cloud, backed by solid financials, suggests a bright horizon for Alphabet. [2]

 

Next Steps

 

Based on today’s results and market movements, I plan to hold my position in Alphabet and monitor upcoming developments, particularly in cloud computing and AI innovations. The strategic directions outlined by the new CFO joining next month will also be critical in assessing any adjustments to my investment approach.

 

 

 

* Past performance is no guarantee of future results

 

[1], [2] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing of future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.


[1] the development of Alphabet shares over the last five years: https://tradingeconomics.com/goog:us

 

Date: 24.7.2024
Positive Outlook on Google's Impressive Quarter

Yesterday was an exceptional day, especially for those invested in Alphabet Inc (NASDAQ: GOOG), the parent company of Google, as the company reported second-quarter earnings that not only beat Wall Street expectations but also showed significant progress in areas poised for further growth. On that basis, the results have significantly boosted my confidence in the tech giant's trajectory. [1]

Date: 17.7.2024
The progress of Google's largest acquisition of Wiz

Being an investor with an eye on the technology sector, I was very intrigued by the news of Alphabet's potential acquisition of cybersecurity startup Wiz. If completed, this would mark the largest acquisition in Alphabet's history and would surpass its previous record with Motorola. In today's note, we'll go over my thoughts and analysis on how this deal could affect Alphabet's position in the technology stock market, as well as my investment strategy.

Date: 10.7.2024
Positive Signals in the PC Market Due to Demand for Artificial Intelligence

This week, I've been most preoccupied with preliminary data from research firm IDC, which today delivered encouraging news for the personal computer (PC) market. According to IDC, global PC shipments grew 3% in the second quarter of 2024, the second consecutive quarter of growth that reversed a two-year trend of declining shipments. The main driver of this recovery is a resurgence in demand for artificial intelligence devices, with Apple (NASDAQ: AAPL) leading the way among PC makers.

Date: 3.7.2024
Tesla vehicle deliveries dropped but beat the expectations

When I am reflecting on Tesla's recent second-quarter results, it's clear that the electric vehicle (EV) pioneer continues to navigate an environment of fierce competition and declining demand. Despite the drop in deliveries, it managed to beat market expectations, which earned the stock a 10% increase in value and took it to a near six months high.*

Date: 26.6.2024
Analysing Microsoft's Investment in G42

I am always on the lookout for strategic moves by major companies that could influence market dynamics and present new opportunities. Microsoft's recent $1.5 billion investment in the artificial intelligence firm G42, based in the United Arab Emirates (UAE), is one such move that caught my attention this week. This development is particularly noteworthy due to its geopolitical implications and potential market impact.

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