Despite Stratospheric Profits, Google Disappoints: Here's Why

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On paper, everything is going very well for Alphabet (Google's parent company), which is posting remarkable results for the last quarter. But, while these figures would make any company on the planet green with envy, they were not enough for investors who punished the company on the stock market yesterday, where the share price fell by 7%. Explanations.

Profits are soaring, but…

In detail, the Mountain View firm reported revenue of $96.5 billion over the last three months, an increase of 12% compared to the previous year, but just a little below Wall Street analysts' expectations (96.6 billion). As for the profit, it amounts to 26.5 billion dollars, an increase of 30%, and exceeds the experts' forecasts.

That said, revenues from Google’s cloud division, which is being closely scrutinized in the context of the emergence of generative AI, reached $11.96 billion in the fourth quarter, an increase of 30%. This is less than what observers had hoped for: $12.2 billion.

The tech giant has also warned that it will devote $75 billion of investment in 2025 compared to only $52.5 billion last year in this technology. It is primarily a question of responding to growing customer demand, always in the context of increasing use of language models.

Concerns about AI and DeepSeek

The question of DeepSeek, this Chinese startup that announced that it had created a very efficient AI for less than 10 million dollars, was also on everyone's mind. Quoted by the New York Times, Evelyn Mitchell-Wolf, an analyst at business research firm Emarketer, notes in a note: “ Cloud’s disappointing results suggest that AI-driven momentum may be starting to wane just as Google’s closed-model strategy is being challenged by DeepSeek.”.

Alphabet CEO Sundar Pichai himself weighed in on the issue on Tuesday. The executive began by congratulating DeepSeek. This will not, however, lead to a change in strategy on the part of the company, which will invest massively to serve billions of consumers through its products and businesses using the cloud.

As highlighted by Les Échos, the rise of generative artificial intelligence also poses a key question for Google. Should it really accelerate on this technology that threatens its core business: the sale of online advertising?? These tools allow you to bypass advertising links associated with search results by exchanging with the chatbot.

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