Google Reports Q4 Growth Despite AI Concerns, Stock Drops 8%

Google's parent company, Alphabet Inc., reported strong financial results for the fourth quarter of 2024, earning $26.5 billion, a 28% increase from the previous year, while overall revenue grew 12% to $96.5 billion. Despite these gains, concerns about the company's heavy investments in artificial intelligence (AI) dampened investor sentiment, leading to an over 8% drop in stock prices following the earnings announcement. Although digital ad sales rose 11% to $72.5 billion, surpassing analyst estimates, revenue growth in the Google Cloud division was weaker than expected, raising questions about the effectiveness of its AI strategy. CEO Sundar Pichai reassured stakeholders that ongoing investments in AI infrastructure and product efficiencies would support future growth. The company plans to increase capital expenditures significantly in 2025, positioning itself for potential gains in the evolving tech landscape. The AI-related developments, including new models and features, have garnered positive feedback but also sparked cautious scrutiny from investors wary of rising costs.