Despite a record-breaking year with $350 billion in revenue, Alphabet's shares have taken a hit due to disappointing growth in its cloud business. The tech giant's Google Cloud division lags behind competitors like Amazon AWS and Microsoft Azure, contributing to missed revenue estimates for the fourth quarter of 2024. Although Google Search and YouTube ads remain strong revenue drivers, generating $72.5 billion, the cloud's underperformance has dampened investor enthusiasm.
In response, Alphabet is planning substantial investments in artificial intelligence, earmarking $75 billion for AI and machine learning technologies. This includes projects like Gemini 2.0 and other advancements meant to bolster its competitive edge. Meanwhile, Waymo, Alphabet's autonomous vehicle division, is set to expand in
Tokyo by 2025, indicating ongoing diversification efforts.
Despite achieving a net income of over $100 billion, a first for the company, Alphabet's stock fell by over 7% post-announcement. Investors seem concerned about shrinking reserves and the lower-than-expected cloud growth, overshadowing the otherwise impressive financial results. The company aims to leverage its AI investments to regain momentum and meet market expectations.
