Alphabet Q4 Earnings: Mixed Results Amidst Antitrust Probe and Cloud Competition

Key Highlights

* Alphabet (GOOG) surpassed EPS estimates but missed revenue expectations.
* Cloud revenue fell short of projections, raising concerns about Alphabet's competitive position.
* The company significantly increased its capital expenditures for 2021.

China's Antitrust Investigation

* China launched an antitrust probe into Google, seen as retaliation against US tariffs.
* Alphabet is also facing challenges from Chinese AI advancements.

Competitive Landscape

* Advertising rival Meta (META) exceeded expectations, but declined to provide full-year guidance.
* Microsoft's (MSFT) cloud revenue grew, though below Wall Street estimates.
* Alphabet faces increasing competition from Amazon (AMZN) and Microsoft in the cloud market.

Q4 Financials

* Alphabet reported EPS of $2.15 vs. estimated $2.13.
* Revenue came in at $96.4 billion vs. expected $96.6 billion.
* Advertising revenue topped $72.4 billion, surpassing forecasts.
* Google Cloud revenue reached $11.9 billion, falling short of $12.1 billion expectations.

Regulatory Risks

* Alphabet continues to face regulatory challenges, including a potential breakup of the company.
* The market remains largely unfazed by immediate concerns of a shake-up.
* Alphabet's stock has outperformed Amazon and Microsoft in the past year.