ABOUT THIS EPISODE
In today's Cloud Wars Minute, I explore why Google Cloud could achieve an astonishing 90% to 100% revenue growth rate in Q3.
Highlights
00:03 — We got some big numbers coming out later this week from SAP for Q3, and then next week we've got Google Cloud, Microsoft, ServiceNow, all on October 28 and October 29. Palantir will release its Q3 numbers the first week of November, but let's take a look here at Google Cloud's Q3.
00:25 — I think there's a very good chance the revenue growth for Q3 could be anywhere from 90% to 95%, even 100%. Let me show you the numbers that drive this thought for me. And again, Alphabet will report its results October 28. If we look over the last four quarters at Google Cloud's growth, its revenue, and its quarter-to-quarter incremental growth, which is becoming for me an extremely important metric, here's what we get.
02:00 — To hit 90% growth for Q3, Google Cloud would have revenue of $28.9 billion, and that would require it to grow in Q3 versus Q2 by $4.1 billion. That's a huge stretch, but look what it did in Q2, $4.8 billion. So even if it brings in less incremental revenue this quarter, they could still grow 90%.
02:48 — Now, to hit this 100% number, its revenue would have to be $30.4 billion. That would require an incremental growth, Q3 versus Q2, of $5.6 billion. It's a big stretch, big number, but if you look at the trajectory here of what they've been doing the past few quarters, it is a big stretch, but it is by no means unreasonable, unfeasible.
04:56 — Say Google Cloud grows only 90%. That is still just phenomenal. Twice as fast, at least, as AWS. About three times faster than Microsoft is growing. 95%, 100% — these are astonishing figures for a business as big as Google Cloud's. It shows just how well the number one company on the Cloud Wars Top 10 is doing here.
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