Shares of Google parent company Alphabet (GOOGL) are down 7% after the technology giant reported a revenue miss and announced increased spending on artificial intelligence (A.I.).
For the fourth and final quarter of 2024, Alphabet announced earnings per share (EPS) of $2.15 U.S., which topped the consensus estimate of analysts that called for $2.12 U.S.
The Silicon Valley-based company’s revenue of $96.47 billion U.S. missed the $96.56 billion U.S. expected on Wall Street. Sales were up 12% from a year earlier.
Also pressuring the stock is management’s announcement that they plan to spend $75 billion U.S. on capital expenditures this year, with most of that money being invested in A.I.
Concerns have been growing about Alphabet’s capital expenditures, especially as cheaper A.I. models emerge from countries such as China.
Across Alphabet’s various business units, YouTube advertising revenue totaled $10.47 billion U.S., which was ahead of the $10.23 billion U.S. expected among analysts.
However, Google Cloud revenue of $11.96 billion U.S. fell short of forecasts that called for $12.19 billion U.S.
Despite the miss, Alphabet’s cloud revenue increased 30% from a year ago.
The company’s online search business generated revenue of $54.03 billion U.S., up 13% from $48.02 billion U.S. a year earlier.
Google’s advertising revenue came in at $72.46 billion U.S., up 11% from $65.52 billion U.S. a year ago.
And the company’s “Other Bets” unit that includes the Waymo self-driving car unit reported revenue of $400 million U.S., down 39% from $657 million U.S. last year.
Prior to today (Feb. 5), Alphabet’s stock had gained 44% over the last 12 months to trade at $206.38 U.S. per share.
