Alphabet posts earnings shock; shares plunge more than 8% after hours

[Financial News]  

Alphabet shares plunged more than 8% in after-hours trading on the 28th (local time). The decline came as free cash flow (FCF) fell amid massive AI investments and both quarterly revenue and net income missed market expectations.
Dark clouds have gathered once again over the AI trade, which had been regaining momentum.
Alphabet's quarterly results, released after the market closed that day, were weak.
According to CNBC, revenue came in at $127.58 billion, below the market forecast of $128.22 billion.
That meant revenue grew 25% from the same period a year earlier, but not enough to meet market expectations.
Earnings per share (EPS) came in at just $2.12. The market had forecast $3.02.
FCF fell to $9.07 billion as a result of massive investments.
Operating income also came in at just $40.58 billion, below the market forecast of $43.19 billion.
Revenue from Google Search, Alphabet's flagship business, also came in at $63.35 billion, below analysts' estimate of $64.96 billion.
Alphabet said the number of users of its AI model Gemini app had topped 1 billion, marking the highest user growth rate for a single product in its history.
Amid optimism about its results, Alphabet shares closed regular trading up $4.31 (1.34%) at $324.89, but plunged in after-hours trading. The shares fell $27.44 (8.45%) to $287.45.

[email protected] Song Kyung-jae Reporter