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After the market closes on Tuesday, Alphabet (GOOG, Financial) will report fourth-quarter earnings, and investors will watch to see the latest developments in artificial intelligence and cloud computing. According to FactSet, analysts expect a profit of $2.13 per share on revenue of $96.7 billion, up from $1.64 per share and $86.3 billion in the year-ago quarter.
Central to this is massive AI investing, with scrutiny on Alphabet's spending now after reports showing that its rival China's DeepSeek had developed a competitive AI model at a fraction of U.S. tech costs. Alphabet's Q3 capital expenditures sat at $13.06 billion, while it's expected to reach $13.26 billion in Q4.
Rising pressures prevail on Google's AI-powered Gemini for it to beat ChatGPT, Meta AI, and DeepSeek, the rising competitors for its Google search dominance. Google announced the Gemini 2.0 Flash upgrade in December with quicker response times.
Following Microsoft's (MSFT, Financial) most recent report that showed a country-less Azure revenue increase of 31%, but down from 33% in the last quarter, the company's cloud segment will also be under review. They will assess whether Alphabet can keep growing, sandwiched between growing competition and regulatory worries about AI.
This article first appeared on GuruFocus.