Despite Alphabet's disappointing fourth-quarter results , many Wall Street analysts remain optimistic that the company's artificial intelligence investments will pay off. Alphabet's revenue of $96.47 billion in the prior quarter fell short of the $96.
56 billion forecast by analysts, according to LSEG. Revenue growth slowed to around 12% year over year, compared to a 13% rise in the same quarter last year. The company also announced it plans to invest around $75 billion in AI this year , coming ahead of the $59.
73 billion consensus estimate, per Visible Alpha. Shares of the Google parent company were last down nearly 7% during premarket trading. GOOGL 1D mountain Alphabet shares on Wednesday "Why does Google get hit on another year of heavy infrastructure investment while Meta's 60%+ capex increase in 2025 is embraced by the Street?" JPMorgan analyst Doug Anmuth asked in a client note on Wednesday.
Pushback on the company's quarterly report is stemming around the "three C's: Capex, cloud revenue trajectory and costs," Anmuth added. While acknowledging that the stock may stay pressured in the near term due to the higher-than-expected spending outlook, the analyst remains bullish on Alphabet's AI innovations and advertising growth are encouraging. Anmuth reiterated his overweight rating on shares, though he trimmed his price target to $220 from $232.
The new price target indicates 6.6% upside from Tuesday's close. Bank of America and Goldman Sachs are some of the other firms con.
