The parent company of Google presented the results for the last quarter of 2023 this Tuesday. The attention was maximum, since Alphabet is part of the Magnificent Seven, the select group formed by Amazon, Apple, Microsoft, Meta, Tesla and Nvidia. These firms have increased their stock market value by 117% since October 2022 thanks to the development of the Artificial intelligence and the expansion of the chip industry. Therefore, all eyes were on the performance of cloud services, as well as Alphabet’s advertising revenue. However, the technology giant has not met expectations and its shares have fallen 4% in the after hours.
Alphabet has presented results that have disappointed investors. The owner of Google obtained income in the last quarter estimated at $86.31 billion compared to the 85,330 estimated by experts. The key to this result has been the revenue generated by advertisingwhich were 65.52 billion dollars, a figure lower than the 65.8 billion estimated by investors.
For their part, the advertising revenue registered by Youtube They were 9.2 billion dollars, a figure higher than the 9.16 billion expected. This has contributed to Alphabet signing the quarter with the fastest revenue growth since 2022, increasing its sales by 13% year-on-year. However, advertising revenue has disenchanted investors.
Thus, the company has obtained 20.69 billion dollars of profit, which translated into $1.64 per share compared to the $1.59 predicted by the market. Among the positive news is the performance of Google Cloud, which has recorded revenues of $9.1 billion compared to the expected $9.02 billion. In this sense, Sundar Pichai has shown his satisfaction with “Google Search and the growing contribution of YouTube and Cloud”, indicating that these last two platforms are already benefiting “from our investments and innovation in Artificial intelligence“.
On the other hand, the traffic attraction costs have been promoted to $13.9 billion, a figure lower than the estimated 14.1 billion. This cost reduction process was parallel to other measures that sought to reduce Alphabet’s spending, such as the elimination of 12,000 jobs in 2023.