Google’s parent company, Alphabet, saw its fourth-quarter revenue last year fall short of expectations, with its cloud revenue especially missing Wall Street forecasts, causing its stock to plummet by 7%.
Alphabet announced its 2024 Q4 earnings, highlighting these issues, after the New York stock market closed on the 4th (local time), according to reports from foreign media like Yahoo Finance.
Reports indicated that Alphabet recorded a revenue of $96.47 billion and a net income of $2.15 per share last year in the fourth quarter. The revenue slightly missed the Wall Street average forecast of $96.56 billion, but the net income per share exceeded the expected $2.13.
The focus was on cloud revenue. Google’s cloud revenue for the fourth quarter last year was $11.96 billion, failing to meet Wall Street’s forecast of $12.19 billion. Although cloud revenue increased by 30% compared to the previous year, it was lower than the 35% growth rate of the third quarter last year and the expected growth rate of 32.3%.
Alphabet competes fiercely with companies like Amazon and Microsoft in the cloud market, making cloud performance one of the key metrics for Alphabet.
Revenue from advertising, including search, exceeded expectations, hitting a record $72.4 billion against the forecast of $71.7 billion. YouTube ad revenue also surpassed expectations, recording $10.47 billion versus the expected $10.23 billion.
In addition, Alphabet announced plans to invest a total of $75 billion this year in capital expenditures, including AI investments, which is a significant increase from the initially expected $57.9 billion.
Following the announcement, Alphabet’s stock, which had closed up 2.5% in the regular session, showed a decline of about 7% in after-hours trading. In after-hours trading on the 4th, Alphabet’s stock sharply fell by 6.81%, reaching $193.56.
Over the past 12 months, Alphabet’s stock price rose about 41%, outperforming Amazon’s approximately 39% increase and Microsoft’s 2% rise during the same period.
This earnings report came amid China announcing an antitrust investigation into Google, reportedly in response to the 10% tariffs imposed by President Trump on Chinese products.
Furthermore, Alphabet is also facing challenges from the Chinese AI model by DeepSeek. This model is known to have achieved outstanding performance with a budget roughly one-tenth of traditional generative AI development costs, causing a stir among Silicon Valley’s big tech.