Alphabet disappointed Wall Street on Tuesday as holiday season ad sales fell short of expectations and overshadowed the company’s efforts in artificial intelligence and cloud computing.
The stock fell more than 4% in after-hours trading.
Google, the inventor of the technology that underpins today’s artificial intelligence boom, faces stiff competition from two companies that have caught the attention of the business world: OpenAI, the creator of ChatGPT, and its financial backer Microsoft.
Google brings a powerful set of models called Gemini and its ChatGPT competitor BardIt struck a deal to invest up to $2 billion in high-profile artificial intelligence startup Anthropic to attract customers from larger cloud rivals Microsoft and Amazon and put Gemini into the hands of advertisers for their Money continues to flow into Google’s search business.
Still, Alphabet faces huge challenges. At a time when geopolitical and economic uncertainty is keeping ad buyers away, artificial intelligence’s advertising push may be far off.The United States has begun exploring artificial intelligence investments including the alphabetGoogle is preparing for a major antitrust appeal In case it is lostthe company likes Others in technology There have been layoffs.
Against this backdrop, Alphabet’s advertising revenue failed to meet expectations. According to LSEG data, advertising revenue in the fourth quarter was $65.5 billion, while analysts on average expected $66.1 billion and $59 billion in the same period last year.
Alphabet faces stiff competition for its advertising budgets from other online platforms such as Facebook, Instagram, TikTok and Amazon, and the U.S. economic signals are mixed.
Total revenue for the quarter ended Dec. 31 was $86.3 billion, compared with expectations of $85.3 billion, according to LSEG.