Shares of Google parent Alphabet sank in after hours trading Tuesday after the search engine giant’s fourth-quarter earnings report revealed slightly weaker quarterly revenues than Wall Street anticipated and predicted much higher spending in 2025 than expected.
Google stock slipped in afternoon trading Tuesday.
Alphabet stock declined 7% to $193 in afternoon trading by 4:35 p.m. EST, equating to a roughly $180 billion loss of market value.
The dive came after Alphabet reported mixed Q4 earnings: Its $2.15 adjusted earnings per share exceeded consensus analyst forecasts of $2.12, while its $96.5 billion in revenue fell just short of estimates of $96.7 billion.
Perhaps most pressing for investors was the company reporting worse-than-expected revenue in its artificial intelligence heavy Google Cloud unit, bringing in $11.96 billion compared to forecasts of $12.19 billion, and guiding for $75 billion in 2025 capital expenditures, far above estimates of $58.8 billion.
Alphabet shares had closed normal trading up 2.5% at a record share price of $207.71.
$72.46 billion. That’s how much advertising revenue Alphabet brought in during 2024’s final three months, easily topping forecasts of $71.66 billion and shattering Q3 2024’s prior record of $65.85 billion.
Alphabet is an ad company at its core, with ads accounting for 75% of sales last quarter, including $54 billion from Google and $10 billion from its YouTube video platform. Google is a part of the generative AI arms race with its Gemini chatbot, and joins fellow Silicon Valley generative AI player Meta in forecasting much higher 2025 spending than Wall Street expected.