By Deborah Mary Sophia and Zaheer Kachwala
(Reuters) – Alphabet will experience investors’ research on his enormous expenses for AI when it reports income on Tuesday, because revenue growth at the Google parent probably delayed in the holiday quarter due to a delay in his advertising and cloud companies.
Like other heavyweights of American technology, Alphabet is confronted with a new study on his capital spending after the Chinese startup Deepseek had launched cheap AI models last month that threaten to push the AI industry into a price war.
Alphabet’s capital expenditure is estimated to have been $50 billion for last year, according to LSEG, with more planned for 2025 to support its cloud expansion and AI-driven search features, including summaries, which are vital to defending its market share and attracting more ad gain.
Microsoft and Meta Platforms Executives defended their hefty AI spending plans last week and said they were crucial to stay ahead in the new field.
In the meantime, the Google Cloud Growth is expected to slow down in the fourth quarter in the midst of high expectations for the segment.
“Although the percentage of the Cloud unit of growth meter is expected to slow down, the increased investments are expected to continue, but the efficiency winnings have kept the profit so far. Supporting this balance will be a critical and investors will evidence of this Want to see, “said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
The turnover from Google’s search and other companies are expected to have increased 11.2% in the fourth quarter, according to visible Alpha estimates, compared to an increase of 12.2% in the third quarter.
In general, Alphabet’s turnover is expected to grow by 11.9% to $ 96.6 billion, slower than the third quarter, according to estimates drawn up by LSEG.
The company – whose search and youtube services are used every month by more than 2 billion people – also tries to retain its dominant share in the market for search advertisements, in the midst of rising competition from E -commercial company Amazon.com and social media – Apps such as Tiktok.
Higher political advertisements around the American presidential elections may have helped Google in the fourth quarter, after Meta-owner-owner had also reported a similar advertising income boost.
Nevertheless, the modest first quarterly prediction of Meta led to concern about the prospects on the advertising market as economic uncertainty increases with the impending threat of global rates.
Cloud focus
The expectations are high for Google’s cloud activities after the segment has achieved its fastest growth in two years in the quarter of September thanks to the rising AI expenditure by companies.