Alphabet's Disappointing Q4 Earnings Drag Down Shares

In Brief:

* Alphabet (GOOG) shares plummeted 8% pre-market following Q4 revenue miss.
* Cloud services revenue fell short of expectations and slowed from previous quarter.
* Analysts express concerns over $75 billion capital expenditure plans for 2025.

Key Points:

* CFO Anat Ashkenazi attributed the cloud revenue shortfall to capacity constraints.
* Search revenue grew 13%, and YouTube ad sales increased 13.8%.
* Wall Street analysts lower sales and profit estimates in wake of cloud computing slowdown.

Analyst Commentary:

DA Davidson Analyst Gil Luria

* Neutral rating
* Price target: $200
* Disappointment with decelerating Google Cloud growth
* Acknowledges benefits of AI integration but notes capacity constraints

Pivotal Research Group Analyst Jeffrey Wlodarczak

* Buy rating
* Price target: $225
* Mixed quarterly results with strong search and YouTube revenue
* Cloud revenue deceleration and high capex guidance raise concerns

JP Morgan Analyst Doug Anmuth

* Overweight rating
* Price target: $220 (down from $232)
* Concerns about 2025 capex, cloud revenue trajectory, and margin expansion potential
* Notes slower Cloud revenue growth and accelerating depreciation