AI Investment Returns Under Pressure: Google's Quarterly Revenue and Profit Both Miss Expectations

Odaily reports: Google's parent company Alphabet (GOOG.O) reported quarterly revenue and profit that fell short of market expectations, indicating the company has yet to generate sufficient returns from its AI business to justify its massive investments. Alphabet said revenue for the three months ended September 30, after excluding payments to partners, was $111.2 billion, with net profit per share of $2.12, both below Wall Street expectations. Google has been racing to build AI infrastructure for itself and its customers, driving capital expenditures to record levels. These investments have helped position Google among the top suppliers providing computing power to AI companies such as Anthropic and Meta. Google is also developing its own AI models and integrating them into consumer-facing products such as its search engine, YouTube, and Gmail. However, relative to the scale of its spending, these efforts have yet to deliver commensurate returns. Alphabet shares fell as much as 7.9% in after-hours trading.