GOOG Stock Alert: Alphabet Falls 6% Despite Earnings Beat

Source: IgorGolovniov / Shutterstock.com

Shares of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), the parent company of Google, slumped 6% on Wednesday after announcing its fourth-quarter and fiscal year 2023 results.

Despite reporting quarterly revenue of $86.31 billion — a 13% increase from the same period last year — and earnings per share (EPS) of $1.64, Google’s figures failed to impress Wall Street. Investors were expecting more than a 3% earnings beat and 25% growth in cloud computing revenues.

While Alphabet’s core Google business showed robust performance, problems seem to be brewing beneath the surface. The company recently announced further job cuts on top of major layoffs in its hardware team last year.

Management also failed to update investors about the launch of its long-anticipated Gemini AI model — Google’s response to OpenAI’s ChatGPT. The project had previously been delayed because of its handling of some non-English queries. As Google continues to lag in the AI race against OpenAI, the Gemini delay appears to be another hit for the tech giant. Muted ad revenue growth — the bulk of Google’s revenues — added to the concern.

CEO Sundar Pichai remained optimistic in the press release, stating, “We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come.”

Investors, however, may need more assurance than optimistic CEO commentary. Alphabet’s cost reengineering and its effects on the workforce, combined with the delay and criticism surrounding the Gemini launch, have triggered fears that the tech giant is getting left behind. Analysts speculate that Google may be spreading out bad news to limit the overall negative impact — a strategy that has so far seen mixed results.

The company is expected to announce its next earnings report on April 23, and investors would be keen to see if the tech giant can manage its expenses more efficiently and launch the Gemini model to bolster its AI portfolio and regain investor confidence.

On the date of publication, Thomas Yeung held long positions in GOOG and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Yeung produced this article using data from Thomson Reuters and unique generative AI prompts. These prompts help distill real-time quarterly earnings data and combine it with InvestorPlace.com’s best-in-class analysis. Our readers get a deep dive into financial results at lightning speed. These articles have been reviewed by a human editor prior to publication. To report any concerns or inaccuracies, please contact us at editor@investorplace.com.

Tom Yeung is a market analyst and portfolio manager of the Omnia Portfolio, the highest-tier subscription at InvestorPlace. He is the former editor of Tom Yeung’s Profit & Protection, a free e-letter about investing to profit in good times and protecting gains during the bad.

InvestorPlace Earnings is a project that leverages data from TradeSmith to automate coverage of quarterly earnings reports. InvestorPlace Earnings distills key takeaways including earnings per share and revenue, as well as how a company stacks up to analyst estimates. These articles are published without human intervention, allowing us to inform our readers of the latest figures as quickly as possible. To report any concerns or inaccuracies, please contact us at editor@investorplace.com.

Source link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the latest stocks updates
straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.

x Logo: Shield Security
This Site Is Protected By
Shield Security