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Q1 Earnings GOOG, AMD & SHOP

Let's review this past quarter's earnings for my 3 tech bets

Posted
By Mark
4 min read

My philosophy for owning these 3 stocks is because I believe they are extremely undervalued and relatively safe in the medium to long term. For this post I won’t expand much more than that but, if you are curious I go more in depth in this post.

Performance: Stock Performance

GOOG April 24th

Google had a fantastic earnings, it was up 5% after hours day of the call.

  • Revenue beat by over $1billion,
  • EPS was $2.81 vs $2.01
    • Almost 40% higher than anticipated!

Honestly we have to put our hands together for google so far my decision to start a position is looking mighty fine.

$95 billion in cash and cash equivalents with only $10billion is outstanding debt

Total stockholder equity is $345 billion!!

One crazy callout is that revenues were up 14% with less marketing / ad spend

Net Income year over year was $34.5 billion vs $23.7 billion

Revenue Streams Year Over Year

  • Search
    • up just shy of 10%
  • Youtube Ads
    • up 11%
  • Google Network
    • down 2.5%
  • Google Services Total
    • up 9.7%
  • Google Cloud
    • up 27%
    • Operating income was well over up 100% with revenue not even close to this much growth. This means they are likely finally achieving economies of scale

Two other fantastic things were announced as well:

  1. They have approved $70 billion stock re-purchase plan
  2. 5% increase to the dividend was announced which will apply for the June 2025 payout

Summary

All in all, Google delivered an outstanding earnings report, beating revenue and EPS expectations by wide margins and posting strong year-over-year growth across key segments like YouTube and Cloud. With $95 billion in cash, minimal debt, and a $70 billion stock buyback plan, the company’s financial strength is undeniable. I will continue to hold onto this one!

AMD May 6th

  • Completion of the acquisition of ZT Systems was announced on March 31st
    • this is needed for them to reach NVIDIA status over the next 5-10 years
  • Revenue Growth 36% YoY, absolutely crushing it
    • data centre, client and gaming
  • GAAP Margin 50%, non-GAAP 54%
    • both slightly up
  • Operating income GAAP went from $0.04 billion in Q1 2024 to $0.8billion this quarter
  • Diluted EPS 44cents vs 7 cents Q1 2024

Data Centre

  • THe big play
  • Revenue 3.7 billion vs 2.3 billion YoY which is up 57%!
    • It should be noted that MI350 has not launched yet which is expected to take us closer to NVIDIA offerings
      • Mid 2025 for these
  • Operating margin up to 25% vs 23% YoY

Client and Gaming

  • Eagle eyed readers will note that these were previously separate but they are now combined into one division
  • Gaming is currently a big drag, expected to grow in the back half of 205
  • Operating margin from 10% up to 17% so we are getting some positive movement

Embedded

  • Down 3% YoY
    • Last Quarter was down 13%
    • Quarter before down 25%
    • So it is actually trending far better potentially even headed towards growth next quarter

Summary

Guidance is for $7.4billion for Q2 2025 with a +/- of $300 million

  • They played this game last Quarter as well and were up $300 million over guidance

Looking through their income statement I have to say I am glad I took the plunge and perhaps I may even add some more. You will have to keep reading to find out 😉

SHOP May 8th

“Merchant success drives an excellent Q1!” - Love the headline

  • 27% Revenue Growth
    • 23% Q1 2024
  • 15% free cash flow margin
    • 12% Q1 2024
  • “We have now achieved eight consecutive quarters of pro forma revenue growth of 25% or more and seven consecutive quarters of GMV growth greater than 20%, all while increasing our free cash flow.”
  • Revenue $2.360 billion vs $1.861 billion last year
    • This was up 1.18% vs expected
  • Net Income $226 million vs $144 million last year

The main negative this quarter was an EPS miss $0.26 expected vs $0.25 reported

Summary

Shopify definitely had the weakest financials of the three but I am far from concerned and will continue to hold! I believe people will continue to increase spending straight through to the end of the year.

Wrap Up

I will continue to hold all 3 of these tech stocks and hopefully we will get to ride the green days up and to the right!

That’s all for Q1 earnings reports in tech, I am still waiting to hear about TD’s earnings and I will report on them with Telus’ over the coming weeks.

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Cheers ☕

My Portfolio
single stocks GOOG AMD SHOP
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