Alphabet Stock: Mixed Q4 Results Spark Investment Concerns

Alphabet's fourth-quarter performance in 2024 painted a complex picture, with revenue climbing 12% to $96.5 billion, yet falling short of market expectations. This disappointment triggered a sharp decline in the company's stock price, dropping more than 7% in after-hours trading. The tech giant's core advertising business generated $72.46 billion, marking a 10.6% increase, while its video platform division contributed $10.5 billion, showing 14% year-over-year growth. Despite posting a 28% rise in profits to $26.54 billion, equivalent to $2.15 per share and exceeding analyst estimates, investors remained cautious about the company's future trajectory.

Cloud Performance and Investment Strategy

The cloud segment's performance emerged as a particular point of concern, with revenue reaching nearly $12 billion - a 30% increase but still below the anticipated $12.2 billion. Adding to market anxiety, Alphabet announced plans to significantly boost its capital expenditure for 2025 to approximately $75 billion, substantially exceeding previous projections of $58 billion. This aggressive investment strategy, primarily targeting cloud infrastructure and AI technology development, has sparked mixed reactions from market observers worried about potential pressure on profit margins in upcoming quarters.