Alphabet shares dropped more than 7% on Wednesday after the search giant fell short of Wall Street’s fourth-quarter revenue expectations and announced big spending plans for its ongoing artificial intelligence buildout.

The stock headed for its worst session in more than a year.

The company topped earnings estimates by 2 cents per share. Revenue came in at $96.47 billion, behind the $96.56 billion expected by LSEG. Alphabet’s revenue grew 12% overall from a year ago, while its YouTube advertising business, search business and services segment slowed year over year.

Alphabet also said it plans to spend $75 billion on capital expenditures as it builds out its AI offerings and races against megacap rivals to build out data centers and new infrastructure. The figure was much higher than the $58.84 billion expected by Wall Street analysts, according to FactSet.

Finance chief Anat Ashkenazi said the higher expenses will help “support the growth of our business across Google Services, Google Cloud and Google DeepMind.” She also said the spending will go toward “technical infrastructure, primarily for servers, followed by data centers and networking.”

The company expects capital expenditures to range between $16 billion and $18 billion. That was higher than the $14.3 billion estimate from FactSet.

JPMorgan analyst Doug Anmuth highlighted costs, capex and cloud revenue as the “culprits” for the stock’s post-earnings performance. Bernstein’s Mark Shmulik also noted that this is the third quarter that the stock move connects to Google’s cloud segment.

“If digital ad growth is akin to a long drive competition, then Google would be sitting comfortably here with strong Search and YouTube bombs down the fairway,” Shmulik said.

“But as the game shifts to the AI putting green, there’s little room for error with a slight cloud miss, a whopping CAPEX guide up to $75B for 2025, and lack of actionable operating leverage commentary leaves Google 3- putting for bogey,” he added.

The U.S. Postal Service said Wednesday it will resume accepting inbound mail and packages from China and Hong Kong, just hours after it suspended service from those regions.

“The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,” the agency wrote in a notice posted to its website. The change is effective immediately.

USPS announced late Tuesday it would stop accepting parcels from China and Hong Kong Posts “until further notice.”

The move came after President Donald Trump on Saturday imposed an additional 10% tax on Chinese goods, as part of sweeping new tariffs on the country’s top three trading partners. Trump on Monday agreed to hold off on imposing 25% tariffs on Canada and Mexico for 30 days.

As part of the tariffs, Trump also closed a nearly century-old trade loophole, called “de minimis,” which allows exporters to ship packages worth less than $800 into the U.S. duty-free. The suspension of de minimis is widely expected to impact upstart Chinese e-commerce companies Temu and Shein, which have relied on de minimis and grew in popularity in the U.S. due to their cheap clothing, furniture and electronics shipped directly from China.

The U.S. Customs and Border Protection agency has said it processed more than 1.3 billion de minimis shipments in 2024. A 2023 report from the House Select Committee on the Chinese Communist Party found that Temu and Shein are “likely responsible” for more than 30% of de minimis shipments into the U.S., and “likely nearly half” of all de minimis shipments originating from China.

The rise of e-commerce and the influx of low-value packages that occurred alongside it prompted Congress in 2016 to raise the de minimis threshold from $200 to $800.

Yin Lam, an analyst at Morningstar, said late Tuesday the massive volume of daily de minimis shipments into the U.S. creates a “significant challenge” for USPS because “it is difficult to check all the packages – so it will take time.”

Critics have argued the trade loophole has allowed illicit drugs, such as fentanyl, to enter the U.S. through the mail. Trade officials have also said de minimis shipments are subject to less scrutiny, raising concerns around counterfeit and unsafe goods.

— CNBC’s Evelyn Cheng contributed to this report.

Uber shares fell around 7% Wednesday after the ride-sharing company reported fourth-quarter results that beat analysts’ expectations for revenue but missed on EPS and offered soft guidance.

Here’s how the company did:

• Earnings per share: 23 cents adjusted vs. 50 cents expected by LSEG.
• Revenue: $11.96 billion vs. $11.77 billion expected by LSEG.

Uber’s revenue grew 20% in its fourth quarter from $9.9 billion a year prior.

The company reported a net income of $6.9 billion, or $3.21 per share, up from $1.4 billion billion, or 66 cents per share, in the same period last year. Uber said its net income includes a $6.4 billion benefit from a tax valuation release, as well as a $556 million pre-tax benefit thanks to gains from revaluations of its equity investments.

Uber’s adjusted earnings per share figure excluded the $6.4 billion benefit, but included the $556 million impact from equity investments, according to LSEG.

The company reported $44.2 billion in gross bookings for the period, which was above the $43.49 billion expected by analysts, according to StreetAccount. Uber said adjusted EBITDA for its fourth quarter was $1.84 billion, up 44% year over year and in line with the $1.84 billion expected by analysts polled by StreetAccount.

For its first quarter, Uber said it expects gross bookings between $42 billion to $43.5 billion, compared with StreetAccount estimates of $43.51 billion. Uber anticipates adjusted EBITDA of $1.79 billion to $1.89 billion, compared with the $1.85 billion expected by analysts.

“Our performance has been powered by rapid innovation and execution across multiple priorities, including the massive opportunity presented by autonomous vehicles,” Uber CEO Dara Khosrowshahi said in a release. “We enter 2025 with clear momentum and will continue to be relentless against our long-term strategy.”

Uber on Wednesday announced it is gearing up for the public launch of robotaxi rides in Austin, Texas through its partnership with Alphabet’s Waymo.

Starting Wednesday, customers in the city can open the Uber app and join the “interest list” to increase their chances of being paired with a Waymo at launch, the company said. Uber and Waymo first announced their plans to bring the robotaxis to Austin in September.

During the company’s quarterly call with investors, Khosrowshahi said while autonomous vehicle technology is progressing, it will take a while to commercialize, in part because of the complex regulatory hurdles.

Uber estimates that the autonomous vehicle market in the U.S. alone is a trillion-dollar opportunity, but Khosrowshahi said it will take “many, many years” to build out and scale. Even with the company’s “aggressive investments” in the technology, it is unlikely to impact Uber’s outlook in the near term, he said.

“We have conviction that Uber will be the indispensable go to market partner for AV players,” he said. “This is undoubtedly one of our top priorities, and we’re investing a lot of technical, strategic and management attention to this topic, with lots more to come.”

There were 3.1 billion trips completed on the platform during Uber’s fourth quarter, up 18% year over year. The number of Uber’s monthly active platform consumers reached 171 million in its fourth quarter, up 14% year over year from 150 million.

Here’s how Uber’s largest business segments performed:

Mobility (gross bookings): $22.8 billion, up 18% year over year

Delivery (gross bookings): $20.1 billion, up 18% year over year

Uber’s mobility segment reported $6.91 billion in revenue, up 25% from a year earlier. StreetAccount analysts were expecting $6.77 billion. The company’s delivery segment reported $3.77 billion in revenue, up 21% from the year prior. Analysts were expecting $3.66 billion, according to StreetAccount.

The company’s freight business reported $1.28 billion in revenue for the quarter, in line with the $1.28 billion it reported during the same period last year. StreetAccount analysts were expecting $1.31 billion. Khosrowshahi has repeatedly pointed to freight as a challenging segment for Uber since consumers are spending more on services than on shipping goods following the pandemic.

Uber will hold its quarterly call with investors at 8 a.m. ET.