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Alphabet sees stock fall 7% after reporting slowing growth

Alphabet’s stock has grown 24% this year, but the company isn’t likely to become a trillion-dollar company quite yet.

Alphabet sees stock fall 7% after reporting slowing growth
[Photo: Paweł Czerwiński/Unsplash]
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Alphabet, Google’s holding company, reported slowing growth in the first quarter, and missed analyst expectations on revenues.

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The company reported $36.34 billion in revenue, most of it from Google’s many-pronged advertising business. Analysts had expected $37.32 billion.

Alphabet’s first quarter revenue grew only 17% from last year. First quarter revenues in 2018 grew 26%.

The company’s stock fell about 3% on the news in after-hours trading. By the end of Alphabet’s call with analysts, the stock had fallen 7%.

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The Google advertising business brought in %30.7 billion, compared to $26.4 billion in the same quarter last year. Its search business shelled out $6.86 billion in traffic acquisition costs, slightly less than the $7.26 billion analysts expected it to pay.

Alphabet’s “other bets” category, which includes the self-driving car company Waymo and the digital health company Verily, generated a small $170 million of profit. Its “other revenues” operations, which includes Google’s hardware business (phones, speakers, laptops, etc.) and its cloud services business, delivered $5.45 billion in revenue, a 25% uptick from last year. “It’s still early in our hardware journey,” said Google CEO Sundar Pichai during the conference call.

Apple, Amazon, and Microsoft have all hit trillion-dollar valuations, and many expect Google to hit that mark as well. Eventually, not today.

About the author

Fast Company Senior Writer Mark Sullivan covers emerging technology, politics, artificial intelligence, large tech companies, and misinformation. An award-winning San Francisco-based journalist, Sullivan's work has appeared in Wired, Al Jazeera, CNN, ABC News, CNET, and many others.

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