Alphabet missed Wall Street estimates for quarterly revenue on Tuesday, in a sign the Google parent was taking a hit from increased competition in the digital advertising market and a slowdown in its cloud computing business.
The tech giant’s shares were down more than 6% in extended trading. Alphabet has gained about 9% so far this year.
Google’s Cloud business posted a 30% rise in revenue to $11.96 billion in the fourth quarter, slowing down from the 35% increase in the September quarter. Analysts were expecting a rise of 32.3% to $12.16 billion, according to data compiled by LSEG.
The soft cloud numbers come even as Google has built out AI features within its cloud computing platform. Larger cloud rival Microsoft also reported weaker-than-expected growth in its Azure cloud platform last week.
Revenue rose 12% to $96.47 billion in the fourth quarter, compared with the average analyst estimate of $96.56 billion, according to data compiled by LSEG.
The company reported a profit of $2.15 per share, beating estimates of $2.13 per share.
