Alphabet Q4 Revenue Misses Expectations as Cloud Growth Slows
Alphabet Inc., the parent company of Google, reported fourth-quarter revenue below analysts' estimates due to decelerating growth in its cloud computing segment.
Key Metrics:
* Revenue: $81.6 billion (excluding partner payouts) vs. $82.8 billion estimated
* Net income: $2.15 per share vs. $2.13 per share estimated
* Cloud revenue: $12 billion, missing estimates
* Search advertising revenue: $54 billion, slightly exceeding estimates
* YouTube revenue: $10.5 billion, surpassing estimates
* Other Bets revenue: $400 million, below estimates of $592 million
The company announced plans to invest $75 billion in capital expenditures in 2025, primarily for data center expansion and artificial intelligence infrastructure. This projection significantly exceeds analysts' expectations of $57.9 billion.
Investors are scrutinizing Alphabet's AI spending, particularly as competition in this market intensifies. The company's cloud unit has benefited from AI-driven demand, but its sales missed estimates. Google Cloud remains behind Amazon Web Services and Microsoft Azure in terms of market share.
Alphabet shares initially fell 8% in extended trading after the earnings announcement, but later recovered slightly. Year-to-date, the stock has gained 9%.
The report also highlights concerns about the impact of antitrust lawsuits on Alphabet's search and advertising businesses. The company faces allegations of monopolizing the search market and violating antitrust laws in the online advertising space.
Despite the revenue miss, Alphabet reported strong performance in YouTube advertising, driven by podcast investments and increased ad spending during the US election.