Alphabet Faces Stock Drop Following AI Investment Surge and Slowing Cloud Growth

The tech giant's $75 billion AI spending plan and underwhelming cloud revenue spark investor concerns about long-term returns.

Alphabet's stock fell over 7% after reporting Q4 2024 earnings that missed revenue expectations, leading to a $175 billion reduction in market value.
The company's Google Cloud division reported $11.96 billion in revenue, a 30% increase year-over-year but below analyst expectations of $12.2 billion.
Alphabet announced a $75 billion capital expenditure plan for 2025, a 43% increase from the previous year, primarily aimed at expanding AI and cloud infrastructure.
Investors are questioning the profitability of Alphabet's AI investments, especially as competitors like DeepSeek introduce cost-efficient AI models.
Despite the stock dip, Alphabet remains confident in its AI strategy, citing significant user growth for its Gemini AI and plans to reduce operational costs over time.