Google’s cloud saw growth decline, shares drop 7%

Google’s revenue growth slowed in the latest quarter, primarily due to a dip in cloud-computing sales, causing a 7% drop in Alphabet’s shares after hours.

The company reported $96.5 billion in revenue for the quarter, a 12% increase from last year, the lowest since 2023.

Google’s cloud division posted $12 billion in fourth-quarter sales, up 30.1% from a year earlier but a slight slowdown from the previous quarter.

Despite challenges in ad revenue growth, Google’s Gemini AI continues to gain traction, with developer usage doubling to over 4.4 million. The company also reported $26.6 billion in net income.

CEO Sundar Pichai stated the company is ramping up investments in AI and data centers, with a $75 billion capital expenditure plan.

The move comes amid Big Tech investors questioning the big spending on AI as China’s cost-effective DeepSeek model rocked Silicon Valley and Wall Street last week.