Alphabet disappointed Wall Street on Tuesday as holiday ad sales fell short of expectations, overshadowing the company’s efforts in artificial intelligence and cloud.
The stock price fell more than 4% in after-hours trading.
Google, which invented the foundational technology for today’s AI boom, faces stiff competition from two high-profile players in the business world: ChatGPT creator OpenAI and its financial backer Microsoft. .
Google is introducing a powerful suite of models to ChatGPT rival Bard called Gemini. The company has signed a deal to invest up to $2 billion in high-profile AI startup Anthropic to win over customers from major cloud rivals Microsoft and Amazon, putting Gemini in the hands of advertisers and using that money to It continues to flow into Google’s search business.
Still, Alphabet faces formidable challenges. AI advertising may still be a long way off, amid concerns that geopolitical and economic uncertainty will discourage ad buyers. The U.S. has launched an investigation into AI investments including Alphabet, Google is preparing to appeal a major antitrust case it lost, and the company, like other companies in the tech industry, is cutting jobs.
Against this backdrop, Alphabet reported lower-than-expected fourth-quarter advertising revenue, coming in at $65.5 billion in the fourth quarter, compared to analysts’ average estimate of $66.1 billion, according to LSEG data. was recorded. In the same period last year, it was $59 billion.
Alphabet faces stiff competition in the U.S. for advertising dollars from other online platforms such as Facebook, Instagram, TikTok and Amazon, as well as a variety of economic indicators.
Overall revenue for the quarter ended Dec. 31 was $86.3 billion, compared to expectations of $85.3 billion, according to LSEG data.
