Alphabet misses revenue expectations as cloud business slows

USA: Alphabet, Google’s parent company, missed Wall Street’s revenue estimates for the quarter on Tuesday amid increased competition in the digital advertising market and a slowdown in the tech giant’s cloud business. Alphabet announced a 12% increase in revenue, reaching US$96.47 billion (~S$130.18 billion). However, according to data from LSEG, this missed the expected US$96.56 billion (~S$130.31 billion).

Reuters reported that the company’s shares dropped 8% in after-hours trading. However, Alphabet has seen a 9% increase in value this year.

Google’s Cloud business grew 30%, reaching US$11.96 billion (S$16.14 billion) in the fourth quarter, down from the 35% increase seen in the previous quarter. Analysts had expected a 32.3% rise to US$12.16 billion (S$16.41 billion), as per data compiled by LSEG.

This comes despite Google adding AI features to its cloud platform. Microsoft, a larger cloud competitor, also reported weaker-than-expected growth in its Azure platform last week.

The company posted a profit of US$2.15 (~S$2.90) per share, surpassing the expected US$2.13 (~S$2.87). /TISG

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