Bloomberg Daybreak: Asia Edition Alphabet Earnings Miss Estimates, China Launches Retaliatory Probe
Feb 5, 2025
Annabelle Droulers, Bloomberg Tech Correspondent based in Hong Kong, dissects Alphabet's disappointing earnings as concerns mount over its cloud revenue and increasing investor caution amid fierce AI competition. She also sheds light on China's retaliatory antitrust probe against the tech giant, framed within the context of escalating U.S.-China trade tensions. The discussion culminates in an analysis of how these tariff dynamics impact currency markets, especially regarding the offshore yuan and broader Asian economies.
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China Probes Alphabet (Android Focus)
- China is probing Alphabet for alleged antitrust violations, though Google search has been unavailable there since 2010.
- The probe likely focuses on Android's dominance in the Chinese smartphone market, not search.
Alphabet's Disappointing Earnings
- Alphabet's Q4 2024 earnings disappointed investors, with weaker-than-expected revenue, especially in the cloud division.
- This weakness adds to investor caution given the global macro environment and the need for tech companies to justify ROI.
DeepSeek's Impact on Capex
- DeepSeek's efficient AI model challenges traditional high-capex approaches, impacting companies like Alphabet and AMD.
- Alphabet's projected $75B capex, exceeding estimates, raises concerns about sustained compute power demand.