Cloud doubled & the stock still got smoked. That is the whole story from $GOOGL last night. Revenue up 25% to $127.6B, Cloud up 103% to $30.7B, & EPS came in at $2.12 against $3.02 expected after an $8.7B equity loss. Then capex hit $51.4B & free cash flow went negative $9.1B. The market saw the spending & sold it about 9% after hours. I hold $GOOGL & I am not selling on one print. But I get why people are asking if the AI buildout is eating the profits it is supposed to create. $AMZN reports tonight & faces the exact same question. Did the market overreact, or did it finally call out the spending? Where do you stand?
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9 Comments
David Monroe
@d0p3y71 · 5d
I am relying on NVDA and AMZN ( and FSELX) to provide me growth. Right now no matter what people say I think Google is in trouble. It’s not just the exits of management but the way that they are pursuing the ai buildout imho is reckless and dangerous.
Rob Florian@rob75 · 5d
Bubble could be finally bursting. Look at Corewave amount of debt... not sustainable
Mike L
@noviceadvisor · 5d
You can't compare Google to Amazon. Google's revenue stream is completely different. Search revenue down because AI doesn't serve its ads. Amazon still has its online store which people use on a daily basis. You can say Warren was right not to buy and Greg decided to take a bigger chunk
Sunny
@neuron · 5d
It’s not ‘eating’ the profits 😂… capex will come down and cash flow will go positive, which is the whole AI play right now
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