AI Gamble: Wall Street Says No
Q4 Earnings: AI Ambitions vs. Investor Anxiety
Big Tech meets big spending—so why is Wall Street unimpressed?
Google (Alphabet) just dropped its Q4 earnings, and while the numbers weren’t disastrous, investors were far from thrilled. The search giant missed revenue expectations by a fraction, but that wasn’t the real issue. Instead, all eyes were on Google’s massive AI spending plans, sending shares tumbling 7.2%—its worst one-day performance since January 2024.
The Numbers: What’s Good, What’s Not
EPS: $2.15 per share (beat expectations by $0.02)
Revenue: $96.47B (just shy of the expected $96.56B)
Net Income: $26.5B
Margin Rate: 27.5% (down from 28.3% last year)
Revenue grew 12% year-over-year, but that growth wasn’t evenly distributed. YouTube ads, Search, and services all showed signs of slowing momentum. And while Google Cloud remains a cash machine, pulling in nearly $12B (a 30% YoY increase), it wasn’t enough to keep investors happy. The problem? That’s slower than the 35% growth it saw in the prior quarter—and short of analysts’ $12.2B forecast.
Wall Street Reacts: A $175B Sell-Off
Despite Alphabet’s continued growth, investors weren’t buying it—literally. The moment earnings dropped, shareholders started dumping stock, wiping out $175B (£140B) in market value. Wonder what is the primary concern? Keep reading below! ⬇️