Google Inc (NASDAQ:GOOGL) is still a core holding, Anthony DiClemente said in a recent interview aired on CNBC.
The comment from the Nomura analyst comes after Google Inc (NASDAQ:GOOGL) reported its Q2 earnings yesterday. The company reported $15.96 billion in revenue, a 22% increase year-over-year. Net income was reported to be $3.42 billion, down compared to its net revenue for last quarter. This has impelled some to question whether the company is still a good stock to own.
Nonetheless, DiClemente expressed in the interview that taking all things into consideration, Google Inc (NASDAQ:GOOGL) is still a core stock in any technology portfolio. He explained:
“The main concerns around Google are deceleration of revenue growth, the very healthy expense growth and then capital expenditure. The company beat on revenue, over 20% revenue growth for a company that trades as less than 20 times earnings, alleviated some concerns. The expense growth is still very healthy as Google continues to support those revenue initiatives but I still think Google is a core holding in technology. It trades at a very reasonable earnings multiple when you juxtapose that with the topline growth which continues to be very impressive for a company of Google’s size.”
Asked about the departure of Nikesh Arora, former Chief Business Officer at Google Inc (NASDAQ:GOOGL), DiClemente said that it more so reflects the ambitions the company he is moving to has in America. Arora leaves the search and web advertising giant to become Vice Chairman of SoftBank Corp. and Chief Executive Officer of SoftBank Internet and Media. He will be replaced by Omid Kordestani in the meantime. According to DiClemente:
“Nikesh is viewed very positively by the Street. He’s the Chief Business Officer at Google [and he’s] very well-respected. I think he’s going to be CEO of a different company. SoftBank has been aggressive. It’s an Asian, Japanese conglomerate company that has got many investments in internet and media globally and they own a venture capital arm. They [also] own Sprint which is a very big asset. So Nikesh can go to SoftBank and achieve his ambitions of being a CEO in the internet media space, something that he was not going to have the opportunity to do at Google. It does make some strategic sense and it’s interesting because it indicates the kind of ambitions and goals that SoftBank perhaps [has] in the US in internet media.”
Watch the video below where more is discussed.
Google Inc (NASDAQ:GOOGL) shareholders includes Boykin Curry’s Eagle Capital Management which held nearly 800,000 shares in the company by the end of the first quarter of the current year. Another shareholders is Paul Ruddock and Steve Heinz’s Lansdowne Partners which held 713,751 shares in the company in the same period.
Disclosure: None
