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Alphabet

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<p class="has-drop-cap">Alphabet (NASDAQ: GOOG) <a aria-label="exceeded (opens in a new tab)" href="https://abc.xyz/assets/95/eb/9cef90184e09bac553796896c633/2023q4-alphabet-earnings-release.pdf" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">exceeded</a> Wall Street’s estimates on top and bottom lines in Q4, but the stock fell in after-hours and premarket trading, likely because Google’s ad revenue fell short of expectations. This shortfall impacted other advertising-dependent tech firms as well in the premarket, leading to declines in the share prices of Snap (NYSE: SNAP), Pinterest (NYSE: PINS), and Meta Platforms (NASDAQ: META). </p> 
<h3 id="alphabet-s-q4-eps-and-revenue-top-estimates-but-ad-sales-in-focus">Alphabet’s Q4 EPS and Revenue Top Estimates But Ad Sales in Focus</h3> 
<p>Shares of Google owner Alphabet tumbled more than 5% in premarket trading Wednesday after the company’s fiscal fourth-quarter ad revenue fell short of Wall Street’s estimates.</p> 
<p>Like the <a href="https://tokenist.com/earnings-watch-microsofts-strong-growth-anticipated-alphabets-ai-and-ad-market-in-focus/" rel="dofollow" class="deco-link">previous </a><a href="https://tokenist.com/microsoft-leaves-google-behind-in-the-ai-race-market-responds/" rel="dofollow" class="deco-link">report</a>, the tech giant beat expectations on top and bottom lines. Earnings per share (EPS) in the quarter stood at $1.64, above the $1.59 projected by LSEG.</p> 
<p>Revenue came in at $86.31 billion, compared to the estimated $85.33 billion. This quarter marked the fastest revenue growth for the Google owner since early 2022, with sales rising 13% from a year earlier.</p> 
<p>Still, investors reacted negatively to the report, primarily because, according to StreetAccount, Alphabet’s ad revenue of $65.52 billion trailed consensus projections of $65.94 billion. YouTube ads generated $9.2 billion, just below the $9.21 billion anticipated by Wall Street.</p> 
<p>The market wanted to see more from Alphabet in the online advertising market, especially since its main competitor, Facebook, is growing rapidly and TikTok poses an increasing threat.</p> 
<p>Nevertheless, the lower-than-expected ad revenue had a knock-on effect on other ad-reliant stocks. Meta Platforms, Pinterest, and Snap all traded lower in the premarket, falling 2.6%, 1.7%, and 2%, respectively.</p> 
<p>Meanwhile, Google Cloud’s revenue during Q4 was $9.19 billion, up 26% year over year and ahead of the estimated $8.94 billion. Operating income for the three months rose to $864 million, compared to a $186 million loss reported in the year-ago quarter.</p> 
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<h3 id="alphabet-microsoft-warn-of-higher-capital-expenditure-amid-rising-ai-costs">Alphabet, Microsoft Warn of Higher Capital Expenditure Amid Rising AI Costs</h3> 
<p>Though Google Cloud’s revenue surpassed Wall Street expectations, benefiting from AI-driven growth, <a href="https://tokenist.com/earnings-watch-microsofts-strong-growth-anticipated-alphabets-ai-and-ad-market-in-focus/" rel="dofollow" class="deco-link">Microsoft’s</a> Azure showed faster expansion during the same period.</p> 
<p>Alphabet’s heavy investments in AI, including servers and data centers, led to a 45% increase in capital expenditures, reaching $11 billion. Remarkably, CFO Ruth Porat anticipates even higher spending in 2024. Similarly, Microsoft’s CFO <a href="https://www.ft.com/content/a062df1d-aaf5-4604-8f97-4444170482f2" target="_blank" aria-label="Amy Hood said (opens in a new tab)" rel="noreferrer noopener nofollow" class="deco-link">Amy Hood said</a> the company expected capital spending to “increase materially”</p> 
<p>To manage costs, Alphabet is scaling back non-essential projects and reducing its workforce, expecting $700 million in severance costs. Enhancing its AI capabilities, <a href="https://tokenist.com/googl-up-2-6-in-premarket-as-new-ai-model-released-to-compete-with-gpt-4/" rel="dofollow" class="deco-link">Google introduced</a> the Gemini suite for its ChatGPT competitor Bard and invested up to $2 billion in AI startup Anthropic, challenging larger cloud rivals Microsoft and Amazon.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe> 
<p><em><strong>Alphabet’s shares rose more than 58% in 2023. Do you think the tech giant can stage similar double-digit gains this year? Let us know in the comments below.</strong></em></p> 
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p> 
<p>The post <a rel="nofollow" href="https://tokenist.com/meta-snap-shares-dip-after-googles-ad-revenue-disappoints/">Meta, Snap Shares Dip After Google’s Ad Revenue Disappoints</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Meta, Snap Shares Dip After Google’s Ad Revenue Disappoints

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