Bloomberg Businessweek Instant Reaction: Alphabet Slides After Cloud Sales Fall Short
Feb 4, 2025
Mandeep Singh, a senior technology analyst at Bloomberg Intelligence specializing in Alphabet, shares insight into the company's recent revenue miss. He discusses the slowdown in Google Cloud growth and its impact on overall stock performance, contrasting it with Snap’s positive earnings. Singh explores Alphabet's ambitious capital expenditure plans for AI infrastructure and the implications of these financial shifts. The dialogue highlights the mixed results from both YouTube and the cloud sector, emphasizing Alphabet’s resilience amidst market challenges.
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Alphabet's Q4 Performance
- Alphabet missed estimates for Q4 revenue, particularly in cloud and YouTube subscriptions.
- Search performed well, but the stock dropped due to high expectations for cloud and YouTube.
Alphabet's CapEx
- Alphabet's increased capital expenditure (CapEx) to $75B is in line with Meta's increase.
- This CapEx increase is likely for AI and is not the reason for the stock drop.
Growth Drivers vs. Search
- Investors view YouTube and Cloud as Alphabet's growth drivers, while Search is expected to decelerate.
- Search performed well, but the underperformance of Cloud and YouTube caused the stock reaction.