Google shares plummet after earnings disappoint

Shares in Google dropped by more than seven per cent on Wall Street on Wednesday (Feb 5), a day after its latest quarterly earnings showed stalled growth in cloud and massive spending.

Just a few minutes after trading opened in New York, shares in Google-parent Alphabet were down 7.16 per cent.

Google Cloud revenue, while growing 30 per cent to US$12 billion, fell short of expectations, raising questions about the division’s ability to compete with rivals in the heated AI infrastructure market.

Alphabet also announced plans to invest approximately US$75 billion in capital expenditures in 2025, a figure that surprised analysts and highlighted the mounting costs of AI development.

Google and rivals are spending billions of dollars on data centres and more for AI, while meaningful returns on investments remain elusive and the rise of lower-cost model DeepSeek from China raises questions about how much needs to be spent. AFP