Alphabet recorded the decline of revenue growth and this triggered its stock price to decrease significantly in its recent earnings statement. Revenue growth for the company remained at only 5% year-to-year despite previously reporting double-digit increases during past periods. The company’s growth rate declined because of an unpredictable advertising climate during an intense period of tech industry competition.
The slowdown, however, most particularly was witnessed in ad revenue, which dominates Google’s revenue. With worldwide economic uncertainty cutting into the advertising budgets of a majority of business concerns, it has been more challenging for Google to sustain similar growth rates than in previous periods.
The investors quickly reacted to the news. Shares of Google plunged nearly 7% in after-hours trading as analysts had been expecting a better result and this dip shows how growing concern has been arising in the market over the firm’s ability to hold its supremacy.
Despite the slowdown, Google continues to grow its cloud services and YouTube segments, which helped partly offset ad revenue decline. However, the overall performance of the company has mounted concerns about future growth prospects.
Alphabet is now looking forward to accelerating the cloud-based computing services it offers, along with developing artificial intelligence and hardware-based offerings. For the moment, however, this slump in its core advertising business is a challenge.
