Google (GOOGL) Slashes Smart TV Spending—Doubles Down on YouTube Dominance

Alphabet’s tightening its belt—but not where it hurts. Google just axed its smart TV budget, redirecting firepower to its cash-cow: YouTube.

Priorities, people.

The pivot screams ‘ad revenue or bust.’ While rivals burn cash on hardware vanity projects, GOOGL’s betting on the platform where 2 billion logged-in users binge content monthly. No fancy TVs required.

Wall Street’s probably scribbling ‘efficiency’ in their notebooks while quietly mourning lost hardware dreams. Meanwhile, YouTube’s ad machine keeps printing—because why sell screens when you own the eyeballs?

Another day, another legacy division getting cannibalized for the algorithmic overlords. Stay diversified, folks.

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This shift is part of a bigger change within Google, as it focuses more on YouTube, which has become the most-watched streaming service in the U.S. In fact, viewers now spend 67% more time on YouTube than on Netflix (NFLX), according to Nielsen. As a result, Google’s leadership is putting more support into growing YouTube’s ad and subscription revenue, which reached over $50 billion in the 12 months ending September 2024. In addition, YouTube and Google Cloud together even passed a $110 billion annual run rate during the same period, which beat the company’s goal for 2024.

With Google pulling back, competitors like Roku (ROKU), Amazon’s Fire TV (AMZN), and The Trade Desk (TTD) are looking to grow their share of the connected TV market. At the same time, YouTube is making leadership changes, which include hiring Disney (DIS) executive Justin Connolly while also considering successors to top roles like Chief Business Officer. As YouTube’s subscription services continue to grow, Google may shift even more resources away from smart TVs and into streaming.

Is Google Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 29 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $199.11 per share implies 20.6% upside potential from current levels.