On Wednesday, shares of Alphabet, the parent company of Google, experienced a decline of over 7%. This drop came after the company reported fourth-quarter revenue that was below Wall Street’s expectations and revealed ambitious spending plans for its ongoing developments in artificial intelligence (AI).
This decline marked Alphabet’s most significant one-day drop since October 2023.
In terms of earnings, Alphabet surpassed expectations by earning 2 cents more per share than analysts had projected. However, its total revenue for the quarter was $96.47 billion, falling short of the $96.56 billion that analysts from LSEG anticipated. While Alphabet’s overall revenue increased by 12% compared to the previous year, growth in key areas such as YouTube advertising, its search business, and other services showed signs of slowing.
Furthermore, Alphabet announced plans to invest $75 billion in capital expenditures to enhance its AI capabilities. This ambitious budget is part of a competitive strategy to build data centers and infrastructure in a race against other large tech companies. Notably, this spending projection significantly exceeds Wall Street’s expectation of $58.84 billion, according to data from FactSet.
Source (CNBC)
