Alphabet Corporation, which includes Google, reported this week about the financial results of the fourth quarter last year. The total revenue increased by 12 % to $ 96.47 billion, but was lower than the forecasts of analysts. The growth of revenue in the cloud segment by 30 % to $ 11.96 billion also did not live up to investors, but this year the company is going to allocate $ 75 billion for capital costs in order to expand computing power.
Image source: Alphabet
The quarterly reports of American corporations, which are the largest players in the global cloud computing market, come against the background of interest in the successes of the Chinese startup Deepseek, which creates quite competitive large language models in the conditions of limited material and technical resources. As you know, Meta✴ Platforms will allocate from $ 60 to $ 65 billion this year as capital costs, Microsoft is ready to allocate $ 80 billion for such needs. Against this background, it is just fired between them with its amount of $ 75 billion, and it is significantly higher than the expectations market corresponding to the value of $ 58.84 billion.
The capital costs of Google this year will direct “mainly to the development of technical infrastructure, primarily servers, and only then data processing centers and network solutions.” In this quarter alone, the capital costs of Google will amount to $ 16 to $ 18 billion, which is also higher than the forecast of analysts ($ 14.3 billion). In the last quarter, the capital costs of Alphabet amounted to $ 14 billion, exceeding the value in the forecast ($ 13.26 billion). This year, Alphabet also intends to increase the number of personnel in the cloud direction and in the segment of artificial intelligence systems.
Alphabet’s quarterly report was generally disappointed with investors. First of all, the growth rate of the holding revenue decreased to 12 %, although a year ago they reached 13 %. Google revenue grew slower in the YouTube segment, and in the search, and in the direction of services. True, the well -known video hosting, according to the results of the quarter, helped out $ 10.47 billion, which is higher than the market expectations. In the cloud segment of the revenue, Google limited $ 11.96 billion against $ 12.19 billion in a forecast, which was still 30 %. According to the company’s management, the demand in this direction exceeded the possibilities of Google to provide specialized services.
Google’s advertising revenue increased by the results of the quarter by 10.6 % against 11 % a year earlier. In the search business, revenue increased by 12.5 % against 12.7 % a year earlier. YouTube has increased advertising revenue by 13.8 % against 15.5 % a year earlier, in the service segment of revenue increased by 10.2 % against 12.4 % a year earlier. All this contributed to the fall of the holding shares of more than 9 % after the end of the trading on the eve. The net profit of Alphabet increased by 28 % to $ 26.54 billion based on the results of the last quarter.
In the direction of Other Bets, which includes the developer of the autopilot systems by Waymo transport, the revenue according to the results of the quarter decreased by 39 % to $ 400 million, and also turned out to be noticeably lower than the expectations of analysts. Nevertheless, the same Waymo began to expand the territory of the operation of its unmanned taxis, and this potentially allows you to count on an increase in profile revenue.