Why the alphabet stock fell by 17% in February

alphabet (Nasdaq: Goog) (Nasdaq: Googl) is well established as a technology leader and one of the most valuable companies in the world. However, the stock is still susceptible to the same types of risks at the macro level as the rest of the stock exchange, and in February a combination of weaker income in its earnings report of the fourth quarter and wider worries about the global economy sent the stock. By the end of the month, Alphabet had lost 17%, according to the data provided by S&P Global Market Intelligence in which the market value of more than 300 billion US dollars was deleted from the company.

As shown from the following table, the share fell on the profit report a month at the beginning of the month and at the end of February as part of a wider sale on the market.

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^SPX data from Ycharts

Overwhelming Q4 results

For the fourth quarter, alphabet sales rose by 12% to 96.47 billion US dollars, but this was below the estimates of 96.67 billion dollars. It was also particularly slower than rival Meta platforms“Growth, shows that the Google Parent Part apparently loses the market share of its largest competitor for digital advertising. The number was also a slowdown compared to earlier a year.

Under the conclusion, the result increased per share from USD $ $ 2.15, which was slightly in front of the consensus for consensus at $ 2.13.

Alphabet does not give complete instructions, but investors seemed skeptical of its plans to increase capital expenditure from 52.4 billion US dollars in 2024 to 75 billion US dollars in order to invest in the infrastructure for artificial intelligence (AGI), since this is currently driving significant income for the company.

Later in the month, Alphabet returned again with a wider sale on the market for macro and tech sector problems. Tech shares fell on reports that Microsoft Canceled some data center rental contracts and afterwards Nvidia The stocks that were sold despite the solid yield report, which indicates that investors believe that the AI ​​shares were overvalued.

In addition, the tariff threats seemed to drive the shares lower. Google also announced work cuts in its cloud division, which could improve the profit, but may also be a sign of growth.

Image source: Getty Images.

What’s next for alphabet

As a leading provider of digital advertising, Alphabet is reacting for global economic growth and business expenditure and in a recession that companies first reduce advertising expenses so that investors should expect that the stock will continue in the macron news.

While the company has asserted itself in the AI ​​race, there is still a few concerns that its search management is susceptible to the competition between Openai and others.

However, these concerns seem to have a price and the stock looks favorable with a price-performance ratio of only 21.5. If Alphabet can maintain its current growth rate, the stock should move higher from here.

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