Alphabet’s huge $31bn capex unsettles investors
Google parent company’s share price dips 3% as investors fret over prospects of returns on investment
Bengaluru — Alphabet reported sharply higher fourth-quarter spending on video content, employees and facilities, worrying investors who sent the tech company's shares down about 3% after hours on Monday. Google’s parent company beat Wall Street’s estimates for revenue and profit, but the bigger-than-expected spending prompted investors to question whether cash funnelled into Alphabet’s newer businesses will generate the returns that its search engine unit historically has. “While the core business is still growing impressively, the significant spending shows growth isn’t quite as capital-light as had been hoped,” said George Salmon, a stock analyst at financial firm Hargreaves Lansdown. The company reported $31.07bn in total fourth-quarter costs and expenses, up 26% from last year. Capital expenditures rose 64% compared to last year, up to $7.08bn. Spending was pushed higher by Google boosting staffing on its cloud computing division, promoting its consumer devices and YouTube subsc...
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