Shares of Google parent Alphabet fell 7% in after-hours trading on February 4, 2025, following the company’s fourth-quarter earnings report. The report revealed slightly weaker revenues and a forecast for significantly increased spending in 2025, raising concerns among investors.
- Alphabet shares dropped 7% in after-hours trading.
- Q4 earnings showed mixed results for Alphabet.
- Google Cloud revenue missed expectations significantly.
- Advertising revenue exceeded forecasts in Q4.
- Capital expenditures for 2025 projected at $75 billion.
- Alphabet heavily relies on advertising for sales.
Alphabet’s stock decline came after the company reported mixed results for the fourth quarter of 2024. The adjusted earnings per share of $2.15 exceeded the consensus estimate of $2.12. However, revenue of $96.5 billion fell short of the expected $96.7 billion. Investors were particularly concerned about the performance of the Google Cloud unit, which generated $11.96 billion, missing forecasts of $12.19 billion.
In addition to the disappointing revenue figures, Alphabet indicated that it plans to significantly increase its capital expenditures in 2025, projecting $75 billion, compared to analyst expectations of $58.8 billion. This announcement raised alarms about the company’s future spending and profitability.
Despite the after-hours drop, Alphabet shares had closed the regular trading session up 2.5% at a record price of $207.71. The company remains heavily reliant on advertising, which accounted for 75% of its sales in the last quarter, including $54 billion from Google and $10 billion from YouTube.
In summary, Alphabet’s mixed earnings report and higher spending forecast have led to a significant decrease in its stock price, reflecting investor concerns about future growth and profitability.
The decline in Alphabet’s stock highlights the challenges the company faces in meeting revenue expectations while managing increased spending, particularly in its cloud services and artificial intelligence initiatives.
