Alphabet Inc. Shares Dip 5% in a Week, Erasing $200 Billion in Market Value
Alphabet Inc., the parent company of Google, has faced a sharp decline in its stock price this week, shedding 5% of its value and wiping off nearly $200 billion from its market capitalisation. As of February 7, Alphabet’s market cap stands at $2.35 trillion, down from $2.5 trillion on February 1, according to data from Companymarketcap.
Weak Cloud Revenues Trigger Investor Concerns
Alphabet’s stock drop was triggered by its fourth-quarter earnings report released on February 5. While the company showed 12% year-on-year growth in overall revenue, reaching $96.5 billion, its Google Cloud business failed to meet analyst expectations. The cloud segment generated $11.96 billion, falling short of the $12.17 billion estimate by Yahoo Finance analysts.
The market reacted negatively to the slower-than-expected cloud growth, as investors were expecting a stronger performance in this high-margin business segment. Alphabet’s hefty investments in artificial intelligence (AI) and computing infrastructure further raised concerns over rising expenses, despite the company highlighting AI advancements as a key driver of future growth.
CEO Sundar Pichai remained optimistic, stating:
“Q4 was a strong quarter driven by our leadership in AI and momentum across the business. We are building, testing, and launching products and models faster than ever, and making significant progress in compute and driving efficiencies.”
Alphabet Stock Performance
Alphabet’s stock price closed at $191.60 in the previous session and was trading 0.27% lower at $191.08 in premarket trading on Friday.
Despite the recent decline, Alphabet shares have delivered over 160% returns in the last five years and more than 30% gains in the past year. On a year-to-date (YTD) basis, the stock has risen by 1.4% in 2025 so far.
Financial Ratios and Market Performance
| Metric | Value |
|---|---|
| Market Cap (Feb 7, 2025) | $2.35 trillion |
| Market Cap (Feb 1, 2025) | $2.5 trillion |
| Stock Price (Feb 7, 2025) | $191.08 |
| Stock Price (Feb 1, 2025) | $201.00 (approx.) |
| Revenue Growth (Q4 YoY) | 12% |
| Google Cloud Revenue (Q4 2024) | $11.96 billion |
| Net Income Growth (Q4 YoY) | 28% |
| 5-Year Stock Return | 160% |
| 1-Year Stock Return | 30% |
| YTD Return (2025) | 1.4% |
Outlook for Alphabet
The recent market reaction underscores investor sensitivity toward cloud growth and profitability. Alphabet’s AI-powered advancements in search, advertising, and cloud computing will remain key factors influencing its future trajectory. While the short-term dip may concern some investors, Alphabet’s long-term growth story remains strong, backed by its dominance in the digital advertising and AI sectors.
Investors will closely watch Alphabet’s upcoming developments, particularly in AI and cloud services, to gauge whether the company can regain market confidence and sustain its upward trajectory.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.