Alphabet, Google’s parent company, is set to release its fourth-quarter earnings report on Tuesday, following Meta’s earnings last week. Investors are eager to see how Alphabet will respond to the threat of Chinese startup DeepSeek’s AI models.
Google has been investing heavily in AI efforts, but DeepSeek’s efficiency raises questions about whether Silicon Valley is overinvesting in AI hardware. This has sparked concerns about the impact on Google Cloud revenue, which is expected to reach $12.1 billion for the quarter.
Cloud growth is crucial for Alphabet as it seeks to gain market share from rivals Amazon and Microsoft. Despite Microsoft’s cloud revenue jumping 21% year over year, Alphabet expects its own cloud revenue to grow significantly.
Other factors that will be on investors’ minds include Trump’s advocacy for TikTok and the potential impact of his policies on Silicon Valley and Google’s court troubles. Additionally, Alphabet shares have risen 41% over the past 12 months, outpacing Amazon and Microsoft shares.
The market is largely optimistic about Alphabet’s performance, with analysts predicting a high-20s to low-30s percentage growth pace for cloud revenue through 2026. However, investors will be watching closely as Alphabet releases its earnings report on Tuesday.
Source: https://finance.yahoo.com/news/alphabet-to-report-q4-earnings-as-investors-look-to-cloud-growth-ai-spending-212322356.html