Alphabet’s Ad Sales Growth Slows Amid Infrastructure and AI Investment

Published on July 31, 2024

Snapshot: Alphabet saw a slowdown in its advertising sales growth in the second quarter, with revenue rising 11.1% year-over-year to $64.6 billion, down from the previous quarter's 13% increase. 

This deceleration, coupled with rising capital expenditures, led to a 1.4% decline in Alphabet’s shares after-hours, as CFO Ruth Porat warned of squeezed margins in the third quarter due to heavy investments in AI and new hardware like the Pixel phone. Alphabet's capital expenditures surged to $13.2 billion, reflecting its focus on AI and cloud infrastructure amid a competitive tech landscape. 

Despite this, Alphabet's total revenue increased by 13.5% to $84.7 billion, and net income rose 28.6% to $23.6 billion. The company’s cloud business and YouTube saw slight growth, though Google canceled its $23 billion acquisition of cybersecurity firm Wiz, opting to enhance organic growth instead.

Additionally, reversing previous plans to eliminate cookies, Alphabet will continue using them in Chrome but will offer users the choice to participate or opt-out.

Full story: Wall Street Journal

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