Alphabet Inc., the parent company of Google, faced a challenging day on Wall Street as its stock tumbled over 7%. Despite posting fourth-quarter revenues of $96.5 billion, marking a 12% increase compared to the same period last year, this growth rate is the slowest since 2023.
The primary disappointment came from Alphabet’s Cloud division, which reported a 30.1% revenue increase to $12 billion—a noticeable deceleration from the previous quarter. Analysts were expecting a stronger performance from the Cloud sector to offset the slowdown in advertising revenue growth, which is being pressured by competitors like TikTok and Amazon. Additionally, Alphabet’s announcement of capital expenditures amounting to $75 billion in 2025 surpassed analysts’ forecasts.
In a broader context, Google is grappling with additional challenges, including an antitrust investigation in China, seen as retaliation for trade tariffs imposed by former President Trump. Domestically, Google is bracing for a legal battle against the U.S. Department of Justice, which is considering measures to break up its online search monopoly.