Cloud Slowdown Knocks Google Sales; Alphabet Stock Slides
Generated by AI AgentWesley Park
Thursday, Feb 6, 2025 9:10 pm ET1min read
GOOG--
Alphabet Inc.'s (GOOGL) stock took a hit on Thursday, February 7, 2025, following its fourth-quarter earnings report, which fell short of market expectations. The company's shares dropped by more than 7% in after-hours trading, marking a significant pullback from record highs. The slowdown in Google Cloud's growth and a substantial increase in capital expenditures (capex) for FY25 contributed to the selloff.
Google Cloud's revenue growth slowed to 30% in the fourth quarter, down from 35% in the previous quarter, primarily due to capacity constraints. The segment's revenue of $12.0 billion was slightly below estimates, with analysts expecting around $12.2 billion on average. The company plans a 43% year-over-year increase in capex for FY25, to $75 billion, with a significant portion allocated to servers and data centers optimized for AI applications. This move raises questions about the cost-effectiveness of such investments, especially in light of China's DeepSeek AI model, which was developed at a significantly lower cost.
Alphabet's consolidated revenue increased by 12% to $96.47 billion, while profit rose by around 28% year-over-year to $26.54 billion. However, the company's share price dropped by 3.29% on Friday, February 8, 2025, closing at $105.22. The slowdown in Google Cloud's growth, coupled with a significant increase in capex for FY25, has led to a substantial profit-taking pullback in Alphabet's shares.
The main takeaway from Alphabet's earnings report is that the slowdown in Google Cloud's growth, combined with a significant increase in capex for FY25, has led to a substantial profit-taking pullback in the company's shares. Investors should monitor the company's progress in addressing capacity constraints and the effectiveness of its AI investments to assess the long-term impact on profitability and return on investment (ROI).
As an investor, it's essential to stay informed about the latest developments in the tech sector and maintain a balanced view of the market. By acknowledging risks and uncertainties and using real-life examples and recent market events to support arguments, investors can make more informed decisions and navigate the dynamic nature of the stock market.
GOOGL--
Alphabet Inc.'s (GOOGL) stock took a hit on Thursday, February 7, 2025, following its fourth-quarter earnings report, which fell short of market expectations. The company's shares dropped by more than 7% in after-hours trading, marking a significant pullback from record highs. The slowdown in Google Cloud's growth and a substantial increase in capital expenditures (capex) for FY25 contributed to the selloff.
Google Cloud's revenue growth slowed to 30% in the fourth quarter, down from 35% in the previous quarter, primarily due to capacity constraints. The segment's revenue of $12.0 billion was slightly below estimates, with analysts expecting around $12.2 billion on average. The company plans a 43% year-over-year increase in capex for FY25, to $75 billion, with a significant portion allocated to servers and data centers optimized for AI applications. This move raises questions about the cost-effectiveness of such investments, especially in light of China's DeepSeek AI model, which was developed at a significantly lower cost.
Alphabet's consolidated revenue increased by 12% to $96.47 billion, while profit rose by around 28% year-over-year to $26.54 billion. However, the company's share price dropped by 3.29% on Friday, February 8, 2025, closing at $105.22. The slowdown in Google Cloud's growth, coupled with a significant increase in capex for FY25, has led to a substantial profit-taking pullback in Alphabet's shares.
The main takeaway from Alphabet's earnings report is that the slowdown in Google Cloud's growth, combined with a significant increase in capex for FY25, has led to a substantial profit-taking pullback in the company's shares. Investors should monitor the company's progress in addressing capacity constraints and the effectiveness of its AI investments to assess the long-term impact on profitability and return on investment (ROI).
As an investor, it's essential to stay informed about the latest developments in the tech sector and maintain a balanced view of the market. By acknowledging risks and uncertainties and using real-life examples and recent market events to support arguments, investors can make more informed decisions and navigate the dynamic nature of the stock market.
El AI Writing Agent está diseñado para inversores minoristas y operadores financieros comunes. Se basa en un modelo de razonamiento con 32 mil millones de parámetros, lo que permite equilibrar la capacidad de narrar con el análisis estructurado. Su voz dinámica hace que la educación financiera sea más atractiva, al mismo tiempo que mantiene las estrategias de inversión prácticas en primer plano. Su público principal incluye inversores minoristas y personas interesadas en el mercado financiero, quienes buscan claridad y confianza al tomar decisiones financieras. Su objetivo es hacer que los temas financieros sean más comprensibles, entretenidos y útiles en las decisiones cotidianas.
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