[Financial Summary] Google's advertising business is disappointing! The cloud business achieved a full-year surplus for the first time
![[Financial Summary] Google's advertising business is disappointing! The cloud business achieved a full-year surplus for the first time](https://sgsnsimg.moomoo.com/feed_image/181250687/e3d4083ad0fd38fc8f5c10db6c0c4e97.png/bigmoo)
The holding company of Google in the US $Alphabet-C (GOOG.US)$announced financial results for 23Q4 (fiscal year ending October to December) on the 31st (Japan time). Of the fourth quarterSales and EPS exceeded expectationsbutSales of the advertising business, which is the main business, fell short of expectations at 65.5 billion dollarsA sense of disappointment spread, so it was a while outside of hoursover 6%It has depreciated. Alphabet did not disclose how much AI sales were in total sales. Also, while focusing on artificial intelligence (AI) related services, it was indicated that investment in data centers would increase rapidly this year.
Sales compared to the same period last yearIt rose 13% to $86.31 billion, exceeding market expectations of $85.36 billion. Adjusted earnings per share$1.64, above market expectations of $1.59. Net profit compared to previous yearA 51.8% increase of 20.7 billion dollars, exceeding market expectations of 20.2 billion dollars。
However, investors place more emphasis on sales in the advertising business, which is Google's main business. According to the financial results report, for the fourth quarterSales of the advertising business fell short of 65.5 billion dollars and the market forecast of 65.8 billion dollars. Among them, it will become the coreSearch business revenue of $480.2 billion, lower than the forecast of $48.15 billion. In response to this, the stock price was temporarily traded after hoursDecrease of more than 6%I did it.
Thomas Monteiro, a senior analyst at Investing.com, analyzed advertising sales that fall below expectations, showing that companies around the world have a sense of uncertainty about the pace of interest rate cuts by major central banks.
![[Financial Summary] Google's advertising business is disappointing! The cloud business achieved a full-year surplus for the first time](https://sgsnsimg.moomoo.com/feed_image/181250687/326849682c243595a059785bc2612910.png/bigmoo)
Cloud businessSales compared to the previous yearAI-related services contributed to a 25.7% increase of 9.19 billion dollars, slightly exceeding market expectations of $8.95 billion. However, although growth accelerated from the previous quarter, it slowed from 32% in the same period last year.
According to analysts, due to the disappointing results of the advertising business, the companyFacing greater uncertaintyDoing it. Google has had a dominant position on the global internet for many years, but it is facing antitrust law (antitrust law) lawsuits. Also,The rise of generative artificial intelligence (AI)by $Microsoft (MSFT.US)$It is now possible to provide interactive programs such as the popular “ChatGPT,” open AI, etc.Google's dominant position is threatened by new competition。
Insider Intelligence analyst Evelyn Mitchellwolf pointed out, “Advertisements account for the majority of sales at Google, and now that the company is preparing to put all its effort into a carefully crafted AI plan, it is not a good sign that its earnings will become unstable.”
Google CEO Sundar Pichai stated at the financial results briefing that the company will soon announce the Gemini Ultra AI model and is experimenting with the Gemini AI search function with the aim of utilizing the Gemini AI model to support advertisement products.
The company is struggling to expand its share in the cloud computing market, and Google Cloud is currently $Amazon (AMZN.US)$It remains in 3rd place after Microsoft, but Google Cloud's financial results for this quarterAchieved a full-year surplus for the first timeIt suggests that it is a relatively healthy business sector. Chief Executive Officer Sander Pichai (CEO) said at an analyst briefing session that one reason for the growth of the cloud businessGenerating AII said that.
Chief Financial Officer Ruth Polat (CFO) said at the financial results briefing, “We are very satisfied with the growth of the cloud business. In terms of profitability, the cloud business has been focusing on improving efficiency for a long time, and the results were shown in the fourth quarter,” he said.
As Google focuses on artificial intelligence and other top priorities,Executives are exploring cost reduction possibilities. Earlier this year, the company announced it would cut hundreds of people, including hardware, engineering, ad sales, YouTube, and news.
Pichai isThere is a possibility that there will be even more job cuts this yearI said it. “We have been gradually reducing the number of non-priority projects across various teams to support investment and operations in growth areas.”
Alphabet's capital investment has increased due to large investments in artificial intelligence. The company's capital investment increased by 2.96 billion dollars in the previous quarter, but Ruth Polat says investment in AI is the cause. Alphabet is about servers, data centers, etc. in order for the company to pave the way for AI productsContinue to invest in infrastructureBecause,2024 spending is expected to “increase significantly”Doing it.
This article uses automatic translation for some of its parts
Source: Bloomberg, Reuters, MINKABU, Alphabet IR Information
ー MooMoo News Sherry
Source: Bloomberg, Reuters, MINKABU, Alphabet IR Information
ー MooMoo News Sherry
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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