Google's parent company, Alphabet Inc., reported strong ad sales growth during the holiday season despite concerns over its artificial intelligence investments. Earnings for the last quarter reached $26.5 billion, up 28%, while revenue rose to $96.5 billion. However, the Google Cloud division's performance fell short of expectations, leading to a significant stock price drop. Analysts worry competitors like Microsoft may be better positioned to capitalize on AI, even as Google's AI features contribute positively to ad sales.
The early signs suggest that AI is working for Google, keeping more of the digital experience within its search engine before sending users to other sites.
The revenue growth in Google Cloud tied to the AI craze was not as robust as anticipated, contributing to an 8% drop in Alphabet's stock price.
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