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By Deborah Mary Sophia and Zaheer Kachwala
(Reuters) – Alphabet will have the examination of the investors against its massive expenses for AI if the profit reports on Tuesday, since sales growth on the Google parents was probably slowed down in the holiday district due to a slowdown in the advertising and cloud company.
As with other US technology heavyweights, Alphabet faces a new examination of its investment expenditure after the Chinese startup Deepseek introduced cost-effective AI models last month that would threaten the AI industry to a price war.
According to the LSEG, Alphabet’s investment expenditure is estimated at $ 50 billion, so that more is planned for 2025.
The executives of Microsoft and Meta platforms defended their strong AI spending plans last week and said they were crucial for staying in the new area.
In the meantime, the Google Cloud growth is expected to slow down in the fourth quarter with regard to the expectations of the segment.
“Although the growth rate (the cloud unit) is expected to slow down, increased investments are expected, but the efficiency gains have so far kept profits. Susannah Streeter, head of money and markets, Hargreaves Lansdown.
According to visible alpha estimates, sales from Google and another business are expected to increase by 11.2% in the fourth quarter, compared to an increase in the third quarter by 12.2%.
Overall, Alphabet’s sales are expected to increase by 11.9% to 96.6 billion US dollars, and, according to estimates, which were compiled by LSEG, more slowly than in the third quarter.
The company – its search and YouTube services are used by more than 2 billion people per month.
Higher political advertising expenses related to the US presidential elections may have supported Google in the fourth quarter after Facebook owner Meta had also reported a similar advertising supply.
Nevertheless, the oppressed forecast of the meta triggered concerns about the prospects of the advertising market in the first quarter, since economic uncertainty increases with the impending threat of global tariffs.
Cloud Focus
The expectations of Google’s cloud business are high after the segment has achieved its fastest growth in September for two years, thanks to the rising AI editions by companies.
