Cloud growth slows for Google
CALIFORNIA, UNITED STATES — Google Cloud’s growth stumbled in the third quarter of 2023, missing Wall Street revenue estimates and causing Alphabet’s shares to drop over 5% after reporting earnings.
Google Cloud revenue rose 22.5% year-over-year to $8.41 billion, falling short of the anticipated $8.64 billion.
This marked the slowest expansion rate for the division since Q1 2021 amid fierce competition, as Microsoft Azure boasts 29% revenue growth following big AI investments.
During an earnings call, Alphabet CFO Ruth Porat said the lagging growth reflects “customer optimization efforts”, indicating reduced business customer spending.
The results contrast with CEO Sundar Pichai’s optimistic outlook last quarter, when he touted Google Cloud’s success in attracting AI startups and its “AI-optimized infrastructure”.
Despite this, Alphabet continues pushing AI integration across search, YouTube, cloud, Pixel, and more. “There’s exciting progress and lots more to come,” said Pichai.
Read more here.
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