(Bloomberg) – Google Parent Alphabet Inc. published income from the fourth quarter that failed the expectations of analysts after the growth of its cloud activity has slowed down, raising investors concerns concerning the billions of people that the company spends in artificial intelligence.
Most of Bloomberg
Quarterly sales, excluding partners’ payments, were $ 81.6 billion, alphabet said in a statement on Tuesday. Analysts had planned $ 82.8 billion, according to data compiled by Bloomberg. The shares have dropped by more than 9% in trade after opening hours.
Alphabet announced $ 75 billion in 2025 capital expenses, far exceeding the $ 57.9 billion that analysts were waiting for. The investment “stimulates income directly” because it helps customers, said the chief executive officer of Alphabet, Sundar Pichai, when the results are called with investors.
The Google Cloud unit is so far the clearest indicator of how the AI boom contributes to business sales. Startups become customers because they require more computing power for their work, but not as quickly as expected. Sales of around $ 12 billion during the period ended on December 31 lacked estimates. Google Cloud still follows behind Amazon.com Inc. and Microsoft Corp., and Pichai said Google should continue to invest in the cloud to “make sure we can respond to the increase in customer demand”.
Alphabet fell as low as $ 187.12 in prolonged exchange, after closing at $ 206.38. Actions have won 9% so far this year.
Investors have urged Alphabet to demonstrate that it maintains momentum in its activities because it spends more strongly on AI and that competition on this market is intensifying. The startup of Chinese AI Deepseek took the Silicon Valley by surprise last month when he declared that he had created a powerful model of AI to a fraction of the cost of the American rivals. During the call for winnings, Pichai called Deepseek a “great team”, but said that Google’s models had also excelled in efficiency.
However, the Deepseek model is open to use, and Google costs money, which makes it fear that its advantages in AI and research can “crude significantly” this year, “said Evelyn Mitchell-Wolf, main analyst of Emarketer, by e-mail.
Dan Morgan, principal director of the Synovus Trust portfolio, added that the technology giant is now undergoing increasing pressure to show how its investments in AI translate into real commercial gains.
