Alphabet shares plummet after revenue miss
Google parent Alphabet on Wednesday missed Wall Street profit and revenue expectations, and AI spending accelerated its cash burn, sending its shares down more than 10 percent in extended trading. Capital expenditures, driven by AI, will increase significantly in 2027, said Chief Financial Officer Anat Ashkenazi, adding that this year's capex forecast was unchanged. She said she also expected…
Alphabet shares experienced a significant drop after the company missed Wall Street's profit and revenue expectations in its latest report. The tech giant's AI spending saw a surge, leading to an acceleration in its cash burn, which resulted in its shares falling more than 10 percent in extended trading. Chief Financial Officer Anat Ashkenazi revealed that capital expenditures, fueled by AI, would see a significant increase in 2027, with this year's capex forecast remaining unchanged.
Ashkenazi also expressed concerns about near-term margin pressure due to the use of third-party cloud capacity. The company reported negative free cash flow of US$9.07 billion, falling short of Wall Street's expectations of being near even. The results highlighted the hefty costs associated with Alphabet's AI initiatives, with investors wary of potential overspending and the risk of falling behind competitors who may be investing more in AI.
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