Technology

Alphabet shares drop as cloud miss overshadows better-than-expected overall results

Published

2 years ago

October 24, 2023

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Sundar Pichai, CEO, Alphabet

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Alphabet reported 11% revenue growth in the third quarter, as a rebound in advertising pushed expansion into double digits for the first time in over a year. The shares dropped about 6% in extended trading as the cloud business missed analysts’ estimates.

Here are the results.

Earnings per share: $1.55 per share vs. $1.45 per share expected by LSEG, formerly known as Refinitiv.
Revenue: $76.69 billion vs. $75.97 billion expected by LSEG, formerly known as Refinitiv.

The company also reported the following numbers:

YouTube advertising revenue: $7.95 billion vs. $7.81 billion expected, according to StreetAccount
Google Cloud revenue: $8.41 billion vs. $8.64 billion, according to StreetAccount
Traffic acquisition costs: $12.64 billion vs. $12.63 billion, according to StreetAccount

The double-digit increase in revenue comes after four quarters of single-digit expansion. Google’s core advertising weakened due to economic softening last year and increased competition from TikTok.

For the third quarter, the company reported advertising revenue of $59.65 billion, up from $54.48 billion a year ago. YouTube advertising revenue beat analyst expectations, reporting $7.95 billion. In a call with investors, Alphabet CEO Sundar Pichai said Shorts, YouTube’s TikTok competitor, now has 70 billion daily views, up from the more than 50 billion daily views at the beginning of the year.

Cloud revenue came in below estimates at $8.41 billion, missing the mark by more than $20 million.

Alphabet’s cloud unit has been a key area of investment as the company tries to catch Amazon Web Services and Microsoft Azure. The business is becoming even more important with the emergence of generative artificial intelligence, because more companies are turning to the public cloud to run hefty workloads.

Even though the unit disappointed, cloud still grew 22% from a year earlier, double the rate of expansion for the company as a whole. The business also swung to an operating profit of $266 million after losing $440 million in the same period a year earlier.

“If you want this stock to keep going higher, you’ve got to have cloud become more profitable,” said Lee Munson, chief investment officer of Portfolio Wealth Advisors, in an interview on Tuesday with CNBC’s Kelly Evans. “It’s a third-rate cloud platform. We need to see it make money.”

Following the launch late last year of OpenAI’s ChatGPT chatbot, Google has been racing to add generative AI technology to more products and is testing it within core search. Generative AI, which provides more creative and thorough answers to simple text queries, could potentially have a major effect on Google’s search — and ads — business if people alter how they look for information online.

Other Bets, which includes the Waymo self-driving car business and the Verily life sciences unit, reported revenue of $297 million, up from $208 million the year prior. However, it reported a loss of $1.19 billion, narrowing slightly from $1.23 billion the prior year.

Much of Google’s year so far has been highlighted by cost cuts after years of unbridled growth. In January, the company announced it was cutting 12,000 jobs, affecting roughly 6% of its full-time workforce. Last month, the company eliminated hundreds of positions from its recruiting organization.

During the third quarter, Google made focused layoffs in various business organizations within the company. An estimated 40 to 45 workers in the news division lost their jobs. The company also laid off more employees from its self-driving car unit Waymo, which recently announced an expansion of its driverless ride-sharing service.

WATCH: Google Cloud must become more profitable for stock to keep going higher

Google Cloud must become more profitable for stock to keep going higher, says Portfolio's Lee Munson

Technology

Amazon considers displaying tariff surcharge on low-cost Haul products

Published

3 hours ago

April 29, 2025

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Amazon considers displaying tariff surcharge on low-cost Haul products

Packages with the logo of Amazon are transported at a packing station of a redistribution center of Amazon in Horn-Bad Meinberg, western Germany, on Dec. 9, 2024.

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Amazon is considering showing a tariff surcharge on items sold via its site for ultra-low-price items, called Haul, the company confirmed to CNBC.

“The team that runs our ultra low cost Amazon Haul store has considered listing import charges on certain products,” an Amazon spokesperson said in a statement. “This was never a consideration for the main Amazon site and nothing has been implemented on any Amazon properties.”

Punchbowl News reported earlier on Tuesday that Amazon would “soon” begin displaying the cost of tariffs alongside the price of each product, citing a source familiar with the company’s plans.

The report drew the ire of the White House, which called Amazon’s reported plans a “hostile and political act.”

This is breaking news. Please refresh for updates.

Technology

Alibaba launches new Qwen LLMs in China’s latest open-source AI breakthrough

Published

10 hours ago

April 29, 2025

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Alibaba launches new Qwen LLMs in China’s latest open-source AI breakthrough

Qwen3 is Alibaba’s debut into so-called “hybrid reasoning models,” which it says combines traditional LLM capabilities with “advanced, dynamic reasoning.”

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Alibaba released the next generation of its open-sourced large language models, Qwen3, on Tuesday — and experts are calling it yet another breakthrough in China’s booming open-source artificial intelligence space.

In a blog post, the Chinese tech giant said Qwen3 promises improvements in reasoning, instruction following, tool usage and multilingual tasks, rivaling other top-tier models such as DeepSeek’s R1 in several industry benchmarks.

The LLM series includes eight variations that span a range of architectures and sizes, offering developers flexibility when using Qwen to build AI applications for edge devices like mobile phones.

Qwen3 is also Alibaba’s debut into so-called “hybrid reasoning models,” which it says combines traditional LLM capabilities with “advanced, dynamic reasoning.”

According to Alibaba, such models can seamlessly transition between a “thinking mode” for complex tasks such as coding and a “non-thinking mode” for faster, general-purpose responses.

“Notably, the Qwen3-235B-A22B MoE model significantly lowers deployment costs compared to other state-of-the-art models, reinforcing Alibaba’s commitment to accessible, high-performance AI,” Alibaba said.

The new models are already freely available for individual users on platforms like Hugging Face and GitHub, as well as Alibaba Cloud’s web interface. Qwen3 is also being used to power Alibaba’s AI assistant, Quark.

China’s AI advancement

AI analysts told CNBC that the Qwen3 represents a serious challenge to Alibaba’s counterparts in China, as well as industry leaders in the U.S.

In a statement to CNBC, Wei Sun, principal analyst of artificial intelligence at Counterpoint Research, said the Qwen3 series is a “significant breakthrough—not just for its best-in-class performance” but also for several features that point to the “application potential of the models.”

Those features include Qwen3’s hybrid thinking mode, its multilingual support covering 119 languages and dialects and its open-source availability, Sun added.

Open-source software generally refers to software in which the source code is made freely available on the web for possible modification and redistribution. At the start of this year, DeepSeek’s open-sourced R1 model rocked the AI world and quickly became a catalyst for China’s AI space and open-source model adoption.

“Alibaba’s release of the Qwen 3 series further underscores the strong capabilities of Chinese labs to develop highly competitive, innovative, and open-source models, despite mounting pressure from tightened U.S. export controls,” said Ray Wang, a Washington-based analyst focusing on U.S.-China economic and technology competition.

According to Alibaba, Qwen has already become one of the world’s most widely adopted open-source AI model series, attracting over 300 million downloads worldwide and more than 100,000 derivative models on Hugging Face.

Wang said that this adoption could continue with Qwen3, adding that its performance claims may make it the best open-source model globally — though still behind the world’s most cutting-edge models like OpenAI’s o3 and o4-mini.

Chinese competitors like Baidu have also rushed to release new AI models after the emergence of DeepSeek, including making plans to shift toward a more open-source business model.

Meanwhile, Reuters reported in February that DeepSeek is accelerating the launch of its successor to its R1, citing anonymous sources.

“In the broader context of the U.S.-China AI race, the gap between American and Chinese labs has narrowed—likely to a few months, and some might argue, even to just weeks,” Wang said.

“With the latest release of Qwen 3 and the upcoming launch of DeepSeek’s R2, this gap is unlikely to widen—and may even continue to shrink.”

Technology

Uber raises in-office requirement to 3 days, claws back remote workers

Published

13 hours ago

April 29, 2025

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Uber raises in-office requirement to 3 days, claws back remote workers

Uber on Monday informed employees, including some who had been previously approved for remote work, that it will require them to come to the office three days a week, CNBC has learned.

“Even as the external environment remains dynamic, we’re on solid footing, with a clear strategy and big plans,” CEO Dara Khosrowshahi told employees in the memo, which was viewed by CNBC. “As we head into this next chapter, I want to emphasize that ‘good’ is not going to be good enough — we need to be great.”

Khosrowshahi goes on to say employees need to push themselves so the company “can move faster and take smarter risks” and outlined several changes to Uber’s work policy.

Uber in 2022 established Tuesdays and Thursdays as “anchor days” where most employees must spend at least half of their work time in the company’s office. Starting in June, employees will be required in the office Tuesday through Thursday, according to the memo.

That includes some employees who were previously approved to work remotely. The company said it had already informed impacted remote employees.

“After a thorough review of our existing remote approvals, we’re asking many remote employees to come into an office,” Khosrowshahi wrote. “In addition, we’ll hire new remote roles only very sparingly.”

The company also changed its one-month paid sabbatical program, according to the memo. Previously, employees were eligible for the sabbatical after five years at the company. That’s now been raised to eight years, according to the memo.

“This program was created when Uber was a much younger company, and when reaching 5 years of tenure was a rare feat,” Khosrowshahi wrote. “Back then, we were in the office five (sometimes more!) days of a week and hadn’t instituted our Work from Anywhere benefit.”

Khosrowshahi said the changes will help Uber move faster.

“Our collective view as a leadership team is that while remote work has some benefits, being in the office fuels collaboration, sparks creativity, and increases velocity,” Khosrowshahi wrote.

The changes come as more companies in the tech industry cut costs to appease investors after over-hiring during the Covid-19 pandemic. Google recently began demanding that employees who were previously-approved for remote work also return to the office if they want to keep their jobs, CNBC reported last week.

Last year, Khosrowshahi blamed remote work for the loss of its most loyal customers, who would take ride-sharing as their commute to work.

“Going forward, we’re further raising this bar,” Khosrowshahi’s Monday memo said. “After a thorough review of our existing remote approvals, we’re asking many remote employees to come into an office. In addition, we’ll hire new remote roles only very sparingly.”

Uber’s leadership team will monitor attendance “at both team and individual levels to ensure expectations are being met,” Khosrowshahi wrote.

Following the memo, Uber employees immediately swarmed the company’s internal question-and-answer forum, according to correspondence viewed by CNBC. Khosrowshahi said he and Nikki Krishnamurthy, the company’s chief people officer, will hold an all-hands meeting on Tuesday to discuss the changes.

Many employees asked leadership to reconsider the sabbatical change, arguing that the company should honor the original eligibility policy.

“This isn’t ‘doing the right thing’ for your employees,” one employee commented.

Uber did not immediately respond to a request for comment.

WATCH: Lightning Round: Uber goes higher from here, says Jim Cramer