Shares of Google parent company Alphabet (GOOGL) are down 7% after the technology company reported fourth-quarter 2024 financial results that missed Wall Street’s revenue forecast.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
The Silicon Valley-based company announced earnings per share (EPS) of $2.15, which topped the consensus estimate of analysts that called for $2.12. However, revenue of $96.47 billion missed the $96.56 billion expected on Wall Street, sending the stock down in after hours trading. Sales were up 12% year over year in Q4.
Also pressuring GOOGL shares was the company’s announcement that it plans to invest $75 billion in capital expenditures throughout this year as it continues to advance its artificial intelligence (AI) strategy. Concerns have been growing about Alphabet’s capital expenditures, especially as cheaper AI chatbots emerge from China.
Breaking Down the Numbers
Across Alphabet’s various business units, YouTube advertising revenue totaled $10.47 billion, which was ahead of the $10.23 billion expected among analysts. However, Google Cloud revenue of $11.96 billion fell short of forecasts that called for $12.19 billion. Despite the miss, the company’s cloud revenue increased 30% from a year ago.
The company’s all-important online search business generated revenue of $54.03 billion, up 13% from $48.02 billion a year earlier. Google’s advertising revenue came in at $72.46 billion, up 11% from $65.52 billion a year ago. And the company’s “Other Bets” segment that includes the life sciences unit Verily and self-driving car unit Waymo reported revenue of $400 million, down 39% from $657 million last year.
GOOGL stock has gained 44% over the last 12 months.
Is GOOGL Stock a Buy?
The stock of Alphabet has a consensus Moderate Buy rating among 29 Wall Street analysts. That rating is based on 21 Buy and eight Hold recommendations assigned in the last three months. The average GOOGL price target of $219.00 implies 6.11% upside from current levels. These ratings are likely to change after today’s financial results.
