Alphabet (NASDAQ: GOOGL) beat Q4 earnings expectations, but a slower-than-expected growth in ad revenues led to a significant decline in stock on Wednesday.
Alphabet reported a net income of $20.69 billion, translating to $1.64 per share on a diluted basis. The company’s revenue saw a 13% increase, reaching $86.3 billion. Google’s advertising revenue for the quarter was $65.52 billion, slightly below the analysts’ forecast of $65.73 billion. This advertising revenue comprises $48 billion from Google search and around $9.2 billion from YouTube advertisements.
The company announced a sustained expansion in its cloud division, a sector that has gained investor attention due to its role in artificial intelligence development. Google Cloud’s revenue outperformed expectations, surpassing $9 billion, marking a 26% increase from the previous year. The firm is striving to gain more market share in the cloud computing sector, where it currently ranks third, trailing behind Amazon (AMZN) and Microsoft (MSFT).
The Chief Executive Officer of Alphabet, Sundar Pichai, stated,
“We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come.”
In the previous month, Google revealed Gemini, its new AI model. This advancement has increased optimism about the company’s capability to stand as a significant rival to OpenAI’s ChatGPT.
Alphabet (NASDAQ: GOOGL) Stock Movement
GOOGL stock plummeted -7.50% on Wednesday. The traders had exchanged hands with 71,461,109 (71.46 million) shares compared to the average daily trading volume of 27.28 million.
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