Shares in Google-parent Alphabet (GOOGL, GOOG) tumbled in after-hours trading following the release of the tech giant's latest results, with the stock down 7% in pre-market trading on Wednesday.
Alphabet (GOOGL, GOOG) posted revenue of $96.47bn (£77.04bn) for the fourth quarter, which slightly missed estimates of $96.7bn.
The company also said it planned to spend $75bn on AI this year, which was 29% higher than analysts expected, according to Reuters.
Dan Coatsworth, investment analyst at AJ Bell (AJB.L), said: "Previously, large capex would have been taken as a positive sign that Alphabet was doing everything it could to capitalise on the hot AI trend.
"Now the reverse is true. There are fears it might be digging itself a big hole and potentially wasting money if rivals like DeepSeek have shown it is possible to do things a lot cheaper."
“There is also the big unknown that’s China," Coatsworth added. "Alphabet (GOOGL, GOOG) has found itself caught in the trade war crossfire between China and the US, with Beijing announcing antitrust investigations into Google."
China announced on Tuesday that it was launching an anti-trust probe into Google on Tuesday, just moments after trade tariffs implemented by US president Donald Trump came into effect.
“Alphabet (GOOGL, GOOG) will need to hold its nerve and hope that China is simply playing games to get back at Trump, and that a compromise around tariffs can be reached soon, otherwise the tech giant could suffer collateral damage," Coatsworth said.
Shares in chipmaker Advanced Micro Devices (AMD) had also slumped in after-hours trading, falling nearly 9% before market open on Wednesday.
While AMD (AMD) delivered strong fourth quarter earnings, its data centre revenue missed against expectations.
AMD (AMD) reported revenue of $7.56bn for the fourth quarter, versus expectations of $7.5bn, according to Bloomberg consensus estimates. Earnings per share was $1.09, in line with estimates.
However, AMD's (AMD) data centre business, its largest segment by revenue, brought in $3.9bn, coming in slightly below expectations of $4.09bn.
For the current first fiscal quarter of the year, the chipmaker guided to revenue of between $6.8bn and $7.4bn, versus analyst expectations of $7bn.
Ben Barringer, technology analyst at Quilter Cheviot, said: "AMD (AMD) may still be taking market share from Intel in the central processing unit side of things, but it remains a long way behind Nvidia (NVDA) and is struggling to catch up when it comes to graphics processing units.
"Investors want the company to take the fight to Nvidia (NVDA), but for now it is very much struggling to break the moat and disrupt its market position. This year will hopefully see some tentative steps in the right direction with new products coming online in the middle part of the year."
Net revenues grew 4% in the fourth quarter to $8.4bn and 7% for the year to $31.8bn.
Alex Chriss, CEO of PayPal (PYPL), said the results were better than expected.
"We set out at the beginning of 2024 to narrow our focus, improve execution, and reposition the business," he said.
"One year later, I’m proud that we’ve laid a strong foundation for long-term, profitable growth across the company’s most important areas. The improvements we made to branded checkout, peer-topeer, and Venmo, plus the progress we made on our price-to-value strategy, are beginning to show up in our results."
European pharmaceuticals giant Novo Nordisk (NOVO-B.CO) delivered strong full-year results on Wednesday, driving shares up nearly 4%.
The company reported net sales of 290.4 billion Danish krone (£32.3bn), which was up 25% on 2023, while operating profit of 128.3 billion Danish krone, was also 25% higher than the previous year.
Novo Nordisk (NOVO-B.CO), which is behind weight-loss drugs Ozempic and Wegovy, said sales in its diabetes and obesity care segment increased by 26% to 271.8 billion Danish krone.
Shares in the company jumped on Friday, after it revealed positive results from its trial of weight-loss drug amycretin.
While Novo Nordisk's (NOVO-B.CO) full-year results were strong, the company did point to slightly softer sales in 2025, saying it expected them to grow between 16% and 24% this year.
"That’s a pretty wide range and there are some signs that growth in GLP-1s where Novo holds a 63% market share is slowing," said Susannah Streeter, head of money and markets at Hargreaves Lansdown (HL.L).
"There are also some concerns emerging about long-term tolerability. But there’s still a long way to run given the profound health economic impact this class of drug promises to deliver.
"A further acceleration will depend on more expanded use cases being approved by health regulators."
On the London market, GSK (GSK.L) shares were up 5.5% after the biopharma company lifted its sales outlook.
In its full-year results, released on Wednesday, GSK (GSK.L) said it was increasing its 2031 sales outlook to more than £40bn ($50.1bn), up from a previous forecast of £38bn, saying this reflected late-stage pipeline progress.
GSK (GSK.L) declared a full-year dividend of 61p per share for 2024 and said it expected this to rise to 64p for 2025, as well as launching a £2bn share buyback programme to be implemented over the next 18 months.
For 2024, GSK (GSK.L) said total sales had increased by 7% to £31.4bn, while core operating profit was up 11% to £9.1bn.
Derren Nathan, head of equity research at Hargreaves Lansdown (HL.L), said: "There was a healthy dose of good news for GSK (GSK.L) as it shrugged off concerns around flagging vaccine sales, with results coming in ahead of forecasts for 2024.
"The pipeline’s in good shape too, with 5 major new product approvals expected this year, underpinning an increase in the 2031 sales outlook to over £40bn of revenue.
"Growth guidance for the current year looks a little pedestrian but at just over 8x forward earnings, the valuation doesn’t reflect the strong progress being made on the ground."
Other companies in the news on Wednesday 5 February:
