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After slowing down the growth in the Cloud business of the Google Parent, the alphabet shares decreased strongly and plans to spend the 75 billion in the construction of capacities for artificial intelligence products this year.
Late on Tuesday, alphabet Reporting of double -digit increases in the income and profits of the fourth quarter, which are driven by its core work business. In a disappointing quarter for its huge cloud unit, in which Google’s data centers were carried out, investors were in a disappointing quarter.
The Cloud department achieved a sales increase by 30 percent to almost $ 12 billion, but this was slower than the growth rate of 35 percent in the past three months, and forecast among the analysts of USD 12.2 billion. The Chief Financial Officer Anat Ashkenazi accused this on “more demand than we were available”.
However, the scale of Google’s AI-related editions to satisfy this demand surprised the market. Investment expenses in the fourth quarter rose to $ 14.3 billion compared to $ 11 billion in the previous year and exceeded expectations for $ 13.2 billion.
Google Sundar Pichai, Managing Director Sundar, said that the expenses for data centers and servers would accelerate to USD 75 billion this year, compared to $ 53 billion in 2024 and a third more than Wall Street.
“The cost of the actual use (AI) will always decrease, which makes what makes more unusual applications feasible,” said Pichai and denied that the company would be out without any problems. “This is the opportunities. It’s as big as it comes, and that’s why you see how we invest to meet this moment. “
The alphabet shares fell up to 8 percent in the trade with after-PE-HOURE, although it was on the right track for the fifth trading day in the past decade and had rejected about $ 200 billion compared to its market capitalization. Nevertheless, the stock had increased by 45 percent in the past 12 months earlier and rated it to 2.5 participants, behind only Apple, Microsoft, Nvidia and Amazon.
Alphabet’s case repeated That of Microsoft last week, which also lost a market value of $ 200 billion, after it also missed estimates of the cloud growth, and the AI
The market reaction reflects more comprehensive concerns about the expenditure in US groups that build and operate the huge data centers with advanced chips, from which they claim they are needed for the training and execution of AI models.
Alphabet’s sale also builds on doubts that were selected last month by a new model of the Chinese start-up start-up deepseek, which claimed to achieve them Comparable performance For us KI executives, including Google Gemini, Openais Chatgpt and Anthropics Claude, about a shoestring budget with far less advanced Nvidia chips.
Pichai said Deepseek had an “enormous team” that had shown that “they can drive a lot of efficiency to really use them (AI) models”.
He also asked questions from the analysts whether Gemini and his competitors exploit his core search business, since users are increasingly using chatbots to find information and answers online to click on the ads that support their free service.
There are hardly any indications that the dominant search engine is questioned. The advertising revenue sought rose by 13 percent to $ 54 billion in the quarter and defeated estimates that were supported by another quarter of advertising on Youtube.
In total, group sales rose 12 percent in the fourth quarter to $ 96.5 billion, compared to the same period of three months in the previous year. Without the acquisition costs of the traffic acquisition for advertising and equipment partners, this number was $ 81.6 billion and was missing from Wall Street in a survey of $ 82.8 billion. The net income rose 28 percent to $ 26.5 billion.
Google is also located in the crosshairs of regulatory authorities all over the world. The company is faced with the prospect broken After the loss of a pioneering case of the US Ministry of Justice, which led to a decision that his search business had a monopolistic behavior.
This week it turned out that China had revived antitrust law examinations in Google’s Android Mobile operating system and had searched his office in Beijing in a step that was interpreted as a lever at collective bargaining with US President Donald Trump.
