(Boomberg) -Google Parent Alphabet Inc. achieved income from the fourth quarter that the expectations of analysts missed after the growth in his cloud activities delayed, so that they were concerned about investors about the billions that the company spends on artificial intelligence.
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The quarterly sales, excluding partner expenditure, were $ 81.6 billion, Alphabet said in a statement on Tuesday. Analysts had projected $ 82.8 billion, according to data collected by Bloomberg. The shares fell more than 9% on the market after the hours.
Alphabet announced $ 75 billion in 2025 capital spending, much higher than the $ 57.9 billion that analysts had expected. The investment is “Direct income” because it helps customers, said Alphabet Chief Executive Officer Sundar Pichai about the win call with investors.
The Cloud unit of Google is so far the clearest indicator of how the AI tree contributes to the sale of the company. Startups become customers because they require more computing power for their work, but not as quickly as expected. The sale of around $ 12 billion in the period of December 31, missed estimates ended. Google Cloud still follows Amazon.com Inc. and Microsoft Corp. In size, and Pichai said that Google should continue to invest in cloud to “ensure that we can tackle the increase in customer demand.”
Alphabet fell as low as $ 187.12 in extensive trade, after closure of $ 206.38. The shares have won 9% this year so far.
Investors have urged alphabet to show that the momentum retains in its companies because it spends more heavily on AI, and as the competition in that market intensifies. The Chinese AI Startup Deepseek took Silicon Valley last month when it said it had created a powerful AI model for a fraction of the costs of American rivals. During the profit call, Pichai Deepseek mentioned a “huge team”, but said that Google’s models are also excel in efficiency.
Nevertheless, the Deepseek model is open for use, and the costs of Google costs the money that its benefits in AI and are looking for this year ‘can be’ meaningful ‘, said Emarketer Senior Analyst Evelyn Mitchell-Wolf via e-mail.
Then Morgan, senior portfolio manager at Synovus Trust, added that the tech giant is now an increasing pressure to show how her investments in AI translate into real business profit.