Alphabet CEO Pichai touts AI, but says business is 'more challenging'
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As Alphabet (NASDAQ:GOOG) shares fell as much as 6% in after-hours trading Thursday following fourth-quarter results that missed analysts' targets, Chief Executive Sundar Pichai said that the online giant is not slowing down with its plans to push further into artificial intelligence technology.
"How we unlock the incredible opportunities AI enables how we focus our investments," Pichai said on a conference call Thursday afternoon. "AI is the most-profound technology we are working on today."
Pichai went on to say that Alphabet (GOOG) is in a "great position as AI reaches an inflection point" and that the company "has been preparing for this moment since early last year."
Yet, despite Pichai's attention to the opportunities in AI, Alphabet (GOOG) investors remained more interested in what the company said about its very recent past as opposed to what might lie ahead in the future.
After the close of trading Thursday, Alphabet (GOOG) reported a fourth-quarter profit of $1.05 a share, on revenue of $76.05B, for the period ending December 31, compared to earnings of $1.53 a share on $75.3B in sales in the fourth quarter of 2021. Wall Street analysts had forecast Alphabet (GOOG) to earn $1.20 a share on $76.5B in revenue.
The most-notable highlight of Alphabet's (GOOG) results was its revenue from advertising, which totaled $59B, or 3.5% less than that $61.2B in ad sales the company reported a year ago.
Pichai said that "beyond our ad business," Alphabet (GOOG) saw strong momentum in areas such as Google Cloud. However, Pichai admitted that Alphabet (GOOG) wasn't immune to some of the issues that have hampered others in the online space.
"It's clear that after a significant period of [business] acceleration in the pandemic, the macro [economic] environment is [now] more challenging," Pichai said.
The company also said it expects to take charges of between $1.9B and $2.3B, with the majority of that in first quarter of 2023 due to its recents announcement that it will cut 12,000 jobs and slow down its hiring plans this year.