Alphabet Reports Mixed Q4 Earnings, Falls Short on Cloud Revenue
Mountain View, Calif. - Google parent Alphabet (GOOG, GOOGL) reported its fourth quarter earnings after the bell on Tuesday, beating on earnings per share but missing on revenue expectations. Notably, the company's cloud segment underperformed.
Alphabet reported earnings per share (EPS) of $2.15 on revenue of $96.4 billion for the quarter. Analysts had anticipated EPS of $2.13 and revenue of $96.6 billion. Advertising revenue reached $72.4 billion, exceeding expectations of $71.7 billion. However, Google Cloud revenue fell short of Wall Street's $12.1 billion forecast, coming in at $11.9 billion.
Alphabet's results come amid China's antitrust probe into Google, viewed as a retaliation to President Trump's tariffs on Chinese goods. The company is also facing competition from DeepSeek's AI models, which have shown potential to disrupt industry leaders.
Competition and Regulatory Risks
Cloud growth is crucial for Alphabet as it aims to compete with rivals Amazon (AMZN) and Microsoft (MSFT). Microsoft recently saw a 21% increase in cloud revenue year-over-year, reaching $40 billion. Google is also monitoring the fate of TikTok, which the President has sought to ban in the US.
Regulatory risks remain a concern for Google. The company is appealing a ruling that found it abused its monopoly power in search. A potential breakup has been suggested as a remedy.
Stock Performance
Despite these challenges, Alphabet shares have outperformed its peers in the past year. The stock is up 41%, outpacing Amazon's 39% and Microsoft's 2% gains.