Google parent Alphabet (GOOGL) reported fourth-quarter earnings that topped analysts’ estimates, but its cloud revenue came in short, sending shares lower in extended trading Tuesday.
The tech giant saw revenue grow 12% year-over-year to $96.47 billion, roughly in line with the analyst consensus compiled by Visible Alpha. Alphabet’s earnings of $26.54 billion, or $2.15 per share, rose from $20.69 billion, or $1.64 per share, a year earlier and beat projections.
However, Google Cloud’s 30% revenue growth to $11.96 billion missed expectations, as well as Google’s Search & Other segment revenue at $54.03 billion.
Alphabet CEO Sundar Pichai said the company expects to invest about $75 billion in capital expenditures in 2025 “to accelerate our progress.” CFO Anat Ashkenazi added that $16 billion to $18 billion of that investment is expected to come in the first quarter, with a majority of the funds set to go toward expanding infrastructure, including servers and data centers.
Pichai said Google Cloud customers are consuming more than eight times the compute capacity they did a year and a half ago, and that investments are needed to keep up with demand.
Pichai also gave a shoutout to AI chipmaker Nvidia (NVDA) on the company’s earnings call, after announcing its first customer running on Nvidia’s Blackwell platform last week.
The results come after the emergence of a sophisticated, cost-efficient AI model from Chinese startup DeepSeek raised concerns about the competitiveness of U.S. firms and their spending on the emerging tech.
Chinese regulators also launched an antitrust probe into Google this week in response to new U.S. tariffs going into effect. Most Google services, including Gmail and YouTube, already are banned in China.
Alphabet’s Class A shares fell nearly 8% in extended trading following the company’s earnings call. The stock closed at a record high of $206.38 Tuesday and has added about 43% over the past 12 months.
UPDATE—Feb. 4, 2025: This article has been updated since it was first published to include additional information and reflect more recent share prices.
