Google’s stock is up more than 3% Tuesday afternoon, seemingly following a Wall Street Journal story about the company’s recent spending and hiring curbs.
As Google becomes more complex, it’s trying to find ways to make itself more efficient, specifically by being increasingly judicious about hiring in areas that don’t have clear business objectives.
This is something analysts and investors have been barking about on recent earnings calls: As Google’s profit margins have slimmed down, they want proof that the company isn’t pouring too much money into its so-called “moonshot” projects, instead of finding ways to grow its core business.
Former CFO Patrick Pichette tried to calm these fears on multiple earnings calls, referencing the company’s discipline and willingness to “throttle back” when it needs to.
“This is a disciplined organisation that looks at the facts, that actually when it’s not working people can sense it and then we have a good conversation about it,” Pichette said on Google’s Q1 earnings call in April, following a question about what Google’s profit margins. “And then on the other side, when we see something really going well, we want to make sure that we push hard for it.”
Although Pichette made this stance known several times and the Wall Street Journal cites public numbers from previous Google earnings, it seems the report was enough to cause a stock surge.
This Thursday’s earnings will be particularly important because it will be the first time the new CFO and long time Wall Streeter Ruth Porat will be on the call.
After Porat took over her new position, Wall Street voiced the hope that having one of their kind within the tech giant will lead to some positive changes within Google, and this report seems to confirm that.
The stock is currently up ~3.3%.