Want insight into the business prospects for a company? Pay attention to what its biggest customers are saying. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) provided its fiscal 2024 fourth-quarter update after the market closed on Tuesday.

Key Takeaways Shares of Google parent Alphabet tumbled Wednesday amid worries about whether the tech giant's spending on AI will pay off. Several analysts lowered their price targets for the stock, citing concerns about the company's weaker-than-expected cloud growth and plans to ramp up spending on AI.

Alphabet reports fourth-quarter earnings after Tuesday's closing bell. Investors will be focused on cloud momentum and AI traction, with shares of the Google and YouTube parent company holding fast near the record levels achieved last week.

Shares of Google parent company Alphabet (GOOGL) are down 7% after the technology company reported fourth-quarter 2024 financial results that

The search giant said it will spend a staggering $75 billion this year as the AI arms race heats up. Investors may have concerns about whether it will pay off.

From a purely business financials perspective, a large part of the reason for the sell-off stemmed from slowing growth in data centres revenue. Google’s cloud business is a huge money driver and posted a 30 per cent increase in revenues, totalling nearly $12bn (£9.6bn).

In a conference call with analysts, Pichai caused a bit of a stir when he said that the company plans to increase its capital expenditure to $75 billion in fiscal 2025 as part of an effort to build out its AI infrastructure. That’s much more than the $58.84 billion that analysts were expecting the company to spend in the coming year.

Alphabet shares fell 8% on Wednesday as investors balked at the Google parent's slowing cloud growth and planned $75 billion capital spending for the year, underscoring growing fears over Big Tech's escalating artificial intelligence costs.