Alphabet will face the scrutiny of investors due to their mass expenditure in AI when he reports their results on Tuesday, since the growth of the income of the Google matrix company was probably decelerated in the Christmas quarter due to a slowdown in its advertising businesses and cloud.
Like other heavyweights of American technology, Alphabet faces a new scrutiny about its capital expenditure after the Chinese Startup Depseek launched low -cost models last month that threaten to push the AI industry to a price war.
It is estimated that Alphabet’s capital spending was 50,000 million dollars last year, according to LSE, and are planned more for 2025 to support their cloud expansion and the search functions promoted by AI, including summaries, which are vital to defend your market share and attract more advertising income.
Microsoft and Meta Platforms executives defended their large spending plans at AI last week, saying they were crucial to stay at the avant -garde in the new field.
Meanwhile, Google Cloud is expected to slow down in the fourth quarter amid high expectations for the segment.
“Although the growth rate (of the cloud unit) is expected to slow down, the high investment is expected to continue, but the efficiency gains have so far maintained the profits afloat. Keeping this act of balance will be critical and investors will want to see evidence of this, ”said Susannah Streeter, head of money and markets of Hargreaves Lansdown.
The income of the search business and others of Google is expected to have increased by 11.2% in the fourth quarter, according to the estimates of Visible Alpha, compared to a 12.2% increase in the third quarter.
In general, Alphabet’s revenues are expected to grow 11.9% to 96.6 billion dollars, slower than in the third quarter, according to estimates compiled by LSE.
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Alphabet’s shares have risen around 7% this year
The company, whose search and YouTube services are used for more than 2,000 million people each month, is also trying to maintain its dominant participation in the search advertising market in the midst of the growing competition of the Amazon electronic commerce firm. com and social media applications such as Tiktok.
The greatest political expense in advertising around the US presidential elections may have helped Google in the fourth quarter, after the goal, owner of Facebook, also reports a similar increase in advertising income.
Even so, the moderate goal forecast for the first quarter has caused concerns about the perspectives of the advertising market as economic uncertainty increases with the imminent threat of global tariffs.
The expectations are high for the Google cloud business after the segment registered its fastest growth in two years in the quarter of September thanks to the increase in expenditure on AI by companies.
Alphabet’s shares have risen about 7% this year, after a 35% rebound last year, promoted by the growing confidence of investors in their AI bets.
However, the concerns of a deceleration greater than expected have increased since last week after the mediocre figures of Microsoft, whose growth in Azure cloud was slowed in the quarter of December, since it prioritized the services of AI About the main offers of the cloud.
“We will want to see if Google has the same problems as Microsoft, where AI was a source of growth, but the main hyperscalars business did it wrong. We will want to see that this is not the case of Google, ”said Gil Luria, Davidson’s analyst.
Google Cloud is expected to report a 32% increase in income in the fourth quarter, according to LSE data, after registering a 35% growth in the third quarter.
That would be faster than the jump of 31% of its much larger rival Microsoft and an estimated 19% increase for Amazon.
With Reuters information.
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