Alphabet's Earnings Reveal AI Gains, But Stock Falls Amid Cloud Revenue Miss and Rising Competition
February 5, 2025
On February 5, 2025, Alphabet Inc. reported its fourth-quarter earnings for 2024, showcasing a revenue of $96.47 billion and a notable 28% increase in net income, largely driven by its aggressive investments in artificial intelligence.
However, the company's cloud revenue growth of 30% fell short of market expectations, leading to a significant drop in its stock price by approximately 6% in after-hours trading.
Meanwhile, India's central bank surprised markets by introducing significant liquidity stimulus measures for banks, aiming to bolster economic stability.
Despite the strong performance in digital ad sales during the holiday season, investor concerns linger regarding the profitability of Alphabet's AI investments, especially in light of rising competition from the Chinese startup DeepSeek.
DeepSeek's cost-effective AI models challenge the notion that advanced AI requires substantial computing resources, pressuring major tech companies like Google, OpenAI, and Meta to reassess their AI spending.
In related news, Stellantis is undergoing management changes and is in search of a new CEO, which has contributed to a decline in its stock price.
General Motors' Cruise division announced significant layoffs, cutting 50% of its workforce after discontinuing its robotaxi service, reflecting a strategic pivot towards advanced driver assistance technologies.
On the operational front, the U.S. Postal Service announced a temporary suspension of inbound parcel shipments from China and Hong Kong, citing operational challenges, which could impact e-commerce and consumer prices.
In food safety news, DJ's Boudain recalled certain sausage link products due to safety concerns, highlighting ongoing issues within the food industry.
In technology advancements, Telefónica Tech is collaborating with IBM to enhance quantum-safe technology, demonstrating a commitment to innovation in cybersecurity.
For those interested in market insights, Delek Logistics offers a conference call accessible via their website, providing updates on their operations.
Looking ahead, the immediate price movement of stocks will heavily depend on management's commentary during earnings calls regarding future earnings expectations.
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