Alphabet Shares Drop 7% After Q4 Revenue Miss

Alphabet Inc. experienced a significant decline in its stock price, dropping over 7% in after-hours trading following a disappointing Q4 earnings report that revealed missed revenue expectations, particularly in the Google Cloud division. Despite strong growth in its core businesses, including Google Search and YouTube advertising, the company's cloud revenue of $11.96 billion fell short of the anticipated $12.19 billion, raising concerns among investors about its capital expenditures. Alphabet announced a plan to invest $75 billion in 2025 to bolster its data centers and AI initiatives, which some analysts view as excessive given the current performance of its cloud services. The market's reaction reflects worries about whether these heavy investments will yield satisfactory returns, especially with competition from lower-cost AI solutions emerging from China. While YouTube's advertising revenue exceeded expectations, the overall sentiment remains cautious as the tech giant attempts to catch up in the AI race. Investors are increasingly scrutinizing Alphabet's spending amid calls for clearer evidence of growth in its cloud segment.