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On Wednesday, Cantor Fitzgerald adjusted its price target for Alphabet stock (NASDAQ:GOOGL), reducing it to $200 from the previous $210, while maintaining a Neutral rating on the company’s shares. According to InvestingPro data, Alphabet currently trades near its 52-week high of $207.05 and maintains a "GREAT" financial health score. The firm’s analyst, Deepak Mathivanan, commented on Alphabet’s fourth-quarter performance, noting that it aligned with Wall Street’s revenue estimates, and earnings before interest and taxes (EBIT) as well as earnings per share (EPS) were 2% higher than expected, according to data from Visible Alpha.
Alphabet’s Search segment saw a 13% growth excluding foreign exchange (FX) impacts, consistent with its third-quarter performance. The company’s overall revenue reached $339.86 billion in the last twelve months, with an impressive growth rate of 14.38%. YouTube also maintained a stable performance in the fourth quarter, benefiting from election advertising revenue. However, the company’s Cloud segment experienced a deceleration in revenue growth by 5 percentage points due to a combination of tougher competition and capacity constraints.
Mathivanan highlighted that Alphabet did not provide specific guidance but noted several factors that could affect first-quarter growth compared to the fourth quarter. These included incremental FX headwinds, tougher comparisons from insurance advertisement spending, and an extra day in the quarter.
The company also provided an outlook on capital expenditures, guiding for a total capex of $75 billion for fiscal year 2025, which represents a 43% year-over-year increase. This forecast significantly exceeds the expectations of both Wall Street and buy-side analysts and is intended to support Alphabet’s technical infrastructure buildout.
In conclusion, Mathivanan stated that while Alphabet’s fourth-quarter results offered few surprises, especially regarding the capex guidance, there was little to stimulate additional enthusiasm for the company’s prospects in 2025. Despite Alphabet’s ongoing advancements in cutting-edge technologies such as artificial intelligence, the analyst pointed out that risks to the core Search business due to competition and antitrust concerns remain high. The revised price target reflects these considerations. InvestingPro analysis reveals strong momentum with a 44.16% return over the past year and maintains 13 additional ProTips for subscribers. For comprehensive insights, access the detailed Pro Research Report available exclusively to InvestingPro subscribers, covering what really matters about Alphabet’s financial performance and future prospects.
In other recent news, Alphabet Inc. has been the subject of several analyst updates following its fourth-quarter earnings report. Guggenheim Securities lifted Alphabet’s stock target to $220 and maintained a Buy rating, despite slower growth in the Cloud sector and a faster decline in the Network segment. Canaccord Genuity also maintained its Buy rating for Alphabet, setting a price target of $225. The firm highlighted the company’s advertising revenue, which slightly exceeded expectations, and the continued strength of its Cloud segment.
Citi analysts, however, cut their price target for Alphabet to $229, while reiterating a Buy rating. The revision followed Alphabet’s fourth-quarter earnings report, which saw an after-hours share price decline of 8%. Despite a substantial increase in capital expenditures for 2025, Citi remains optimistic about Alphabet’s future. On the other hand, JMP Securities reiterated a Market Perform rating, citing potential antitrust penalties that could affect Alphabet’s revenue from search operations in the U.S.
Lastly, DA Davidson maintained a Neutral rating on Alphabet shares with a price target of $200, following Alphabet’s fourth-quarter earnings that revealed challenges in its Google Cloud Platform business. Despite these challenges, the company has seen positive effects from integrating artificial intelligence across its range of products. These are the recent developments concerning Alphabet Inc. as reported by various financial analysts.
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