February 4, 2020 / 4:06 PM / 15 days ago

Google parent Alphabet loses trillion-dollar status after revenue miss

FILE PHOTO: The brand logo of Alphabet Inc's Google is seen outside its office in Beijing, China August 8, 2018. Picture taken with a fisheye lens. REUTERS/Thomas Peter/File Photo

(Reuters) - Alphabet Inc (GOOGL.O) shares fell 4% on Tuesday after the search giant posted its first holiday-quarter revenue miss in five years, even as new disclosures on the company’s smaller YouTube unit were warmly welcomed by Wall Street.

The company’s market value slipped below the trillion-dollar level on a day broader markets were strongly higher.

At least 11 analysts, however, raised their price targets on the stock, saying the company’s prospects remained strong.

“While the mix of ad revenue differs from expectations, we believe it shows the sustainability of search growth led by mobile, and the headroom for YouTube, especially as bigger TV dollars begin to shift online,” J.P. Morgan analyst Doug Anmuth said.

Chief Executive Sundar Pichai has sought to counter slowing revenue growth in the company’s main advertising business by focusing on its smaller fast-growing units.

Disclosing YouTube numbers for the first time, the company said ad revenue at the video streaming site rose 31% compared with last year, while revenue from the cloud business rose 53%.

“We welcome changes already implemented by (Pichai),” Morningstar analyst Ali Mogharabi said. “Alphabet has finally begun to open the “black box”.”

Shares of Alphabet Inc were down 4.1% at $1,422 in early trading.

Reporting by Aakash Jagadeesh Babu and Munsif Vengattil in Bengaluru; Editing by Saumyadeb Chakrabarty

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