Alphabet Shares Fall as Cloud Revenue Misses Expectations
Alphabet’s Disappointing Cloud Revenue Results
Google parent company Alphabet Inc Class C witnessed a more than 5% drop in shares during after-hours trading due to weaker-than-expected revenue gains from its cloud computing operation. The company reported earnings of $1.55 per share for the third quarter, with revenue amounting to $76.7 billion. While both figures surpassed profit and revenue expectations, revenue growth was only 11%, falling short of projections in its cloud division which increased by 22% to $8.4 billion, missing the estimated $8.6 billion mark.
Positive Growth in Other Business Segments
Despite the cloud revenue setback, Google reported a favorable 11% increase in revenue from search and other businesses, totaling $44 billion. Additionally, YouTube advertising revenue experienced a 12% rise to $7.9 billion. Sundar Pichai, Alphabet’s CEO, expressed his contentment with the financial results and product momentum achieved in the quarter. He emphasized the company’s focus on enhancing the capabilities of artificial intelligence (AI) across various platforms, including Search, YouTube, Cloud, and their Pixel devices.
Overall, Alphabet remains optimistic about its future prospects, with Pichai stating, “We’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come.”
Investors closely watch Alphabet’s quarterly performance, particularly the growth of its cloud computing division. Despite falling short of expectations in this area, the company’s overall positive revenue figures indicate a strong foundation for future growth and innovation.
