Alphabet CEO Sundar Pichai walks to lunch at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 12, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet shares slid more than 6% in extended trading on Tuesday after the company reported ad revenue that missed analysts’ estimates.
Here are the key numbers:
Earnings per share: $1.64 vs. $1.59 expected by LSEG, formerly known as Refinitiv.
Revenue: $86.31 billion vs. $85.33 billion expected by LSEG.
Google Cloud: $9.19 billion vs. $8.94 billion expected, according to StreetAccount.
YouTube ads: $9.2 billion vs. $9.21 billion expected, according to StreetAccount.
Traffic acquisition costs: $13.9 billion vs. $14.1 billion, according to StreetAccount.
Alphabet reported its fastest quarter for revenue growth since early 2022, with sales climbing 13% from $76.05 billion a year earlier, the company said in a statement. However, ad revenue of $65.52 billion trailed analysts’ estimates of $65.94 billion, according to StreetAccount.
YouTube, which has been helping to drive accelerated growth, came in just shy of expectations.
The results, while generally above estimates, weren’t enough to satisfy investors, who pushed the stock to fresh highs last week. Facebook’s ad business is growing faster, and TikTok represents an ongoing competitive threat as younger users turn to the app to create short viral videos.
Google Cloud remains a growth engine, with 26% expansion in the fourth quarter compared to a year ago. The company is also drawing profit from the cloud business, which was losing money for years as it tried to keep up with Amazon Web Services and Microsoft Azure. Operating income in the fourth quarter was $864 million, following a year-ago loss of $186 million.
Across Alphabet, CEO Sundar Pichai continues to focus on investments in artificial intelligence and embedding new generative AI tools into more of Google’s key products. To get there, Pichai has said the company has to make cuts elsewhere, meaning more layoffs on top of last year’s 12,000 cuts, which amounted to roughly 6% of its full-time workforce.
“We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud,” Pichai said in Tuesday’s press release. “Each of these is already benefiting from our AI investments and innovation.”
In December, Google launched the large language model called Gemini, which it considers its largest and most capable AI model to date. The company is planning to license Gemini to customers through Google Cloud for them to use in their own applications.
Alphabet said due to the workforce reductions last year, the company recorded severance and related charges of $2.1 billion for 2023. Additionally, Google exited some of its offices, resulting in charges of $1.2 billion for the quarter and $1.8 billion for the year.
Alphabet Chief Financial Officer Ruth Porat said on the earnings call that severance-related expenses in the first quarter will be about $700 million.
Net income jumped 52% in the fourth quarter to $20.7 billion, or $1.64 per share, from $13.6 billion, or $1.05 per share, a year earlier. Operating margin, the profit left after subtracting costs to run the business, expanded to 27% from 24%.
Other Bets, which includes the Waymo self-driving car business and the Verily life sciences unit, reported revenue of $657 million, up from $226 million the year prior. Its loss narrowed to $863 million from $1.24 billion.
Alphabet shares are up 56% in the past year, not including the after-hours drop. Shares of Meta and Microsoft have also reached fresh highs as investors continue to pour into tech stocks.
Microsoft reported better-than-expected financials on Tuesday but it’s stock price also fell following the announcement. Amazon, Apple and Meta are scheduled to release results Thursday.
— CNBC’s Jennifer Elias contributed to this report.
Microsoft‘s Outlook email service malfunctioned for several hours Wednesday and Thursday, prompting some people to post on social media about the inability to reach their virtual mailboxes.
The issue began at 6:20 p.m. Eastern time on Wednesday, according to a dashboard the software company maintains. It affected Outlook.com as well as Outlook mobile apps and desktop programs.
At 12:21 ET the Microsoft 365 Status account posted that it was rolling out a fix.
“Our configuration changes have effectively resolved impact in targeted infrastructure. We’re now deploying the changes worldwide to resolve impact for all users,” Microsoft said in an X post on Thursday afternoon.
The company’s status page said “most impacted users will experience relief within the next two hours,” and that it was continuing to monitor the service.
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On social media, some people reported that Outlook was functioning properly after hours of users posting about problems.
With hundreds of millions of active users, Outlook is important, although Apple and Google‘s email clients are more popular, according to data from analytics company Litmus.
A worker prepares orders at an Amazon.com Inc. fulfillment center.
Jason Alden | Bloomberg | Getty Images
Daphnee Poteau, a Haitian who came to the U.S in 2023, began working for Amazon last year at a returns center in Indianapolis. While packing up boxes, she met her husband Kristopher Vincent, who’s been at the site, known as IND8, since 2013.
Last month, Poteau was contacted by the Department of Homeland Security, after the Trump administrationcanceled humanitarian immigration programs that allowed participants to live and work legally in the U.S. for two years while applying for permanent status.
A notice from DHS told Poteau that her parole program was being terminated. Her last day at Amazon was June 28. She’s among a group of warehouse workers whose jobs have been eliminated since DHS revoked the parole program that was created during the Biden administration.
While Poteau tries to secure a spousal visa, her future in the U.S. is uncertain. She and Vincent, who’s from Indiana, said they’re concerned about being able to afford rent and costly immigration fees.
“We’re taking it one day at a time, but it does leave me stressed that they’re going to come and try to get her, even though she does have an asylum case pending in court,” Vincent said in an interview.
“Everything we’ve seen in the news shows they flagrantly no longer care what the laws say,” Vincent said.
Poteau and her terminated co-workers had been protected under programs that provided Haitians, Cubans, Nicaraguans and Venezuelans with temporary legal status in the U.S. Many of the employees at IND8 are Haitian, a large enough contingent that some of the morning staff meetings are translated into Creole, Vincent said.
Daphnee Poteau met her husband Kristopher Vincent while working at an Amazon warehouse in Indianapolis.
Kristopher Vincent
Amazon last month began asking staffers who came to the U.S. under the Biden-era program to provide updated work permits within a certain timeframe or they would be put on unpaid leave, according to documents viewed by CNBC.
Several workers who spoke to CNBC said they were dismissed by Amazon in late June after they couldn’t get new work authorizations.
Amazon declined to say how many employees were let go following the changes in immigration policy, but spokesperson Richard Rocha said the company prepared for potential staffing impacts due to changes in work authorization programs, and made adjustments to be in compliance with the law.
“We’re supporting employees impacted by the government’s recent changes in immigration policy,” Rocha said in a statement. “Over the past few months, we’ve been in regular communication with these employees about the changes and are ensuring they’re aware of all available resources.”
The company has provided impacted employees with information about where to find free or low-cost legal services, access to counseling support and other resources, Rocha said.
A DHS spokesperson pointed to the agency’s announcement terminating the humanitarian parole program.
Fired before Prime Day
As part of the Trump administration’s broad immigration crackdown, DHS has eliminated not just the humanitarian parole program. It’s also ended separate programs that provided temporary protected status to Venezuelans, Haitians, Nicaraguans and Hondurans seeking refuge from their native countries, which have suffered from armed conflict and humanitarian crises. Last week, a federal judge ruled the Trump administration can’t revoke the temporary protected status, or TPS, of Haitian migrants. The White House said it will appeal the ruling.
Amazon is far from alone. Other companies including Walmart and Disney have been forced to fire employees or put them on leave in order to comply with shifting federal policies.
Among private employers in the U.S., only Walmart has a bigger workforce than Amazon. Most of the e-commerce giant’s 1.56 million employees globally are concentrated in its warehouse operations.
The terminations started just as Amazon was gearing up for its annual Prime Day discount blitz, which began on Tuesday and lasts four days. The event is typically one of the busiest periods of the year for Amazon warehouse and delivery employees, alongside the holiday shopping season.
Amazon has counted on immigrants to meet a big part of its staffing needs. In 2022, the company set a goal to hire 5,000 refugees and other forcibly displaced individuals by the end of 2024.
While Trump’s policies create a challenge for large employers like Amazon, the real devastation is being felt by the immigrant workers. Those who now find themselves unemployed and lacking documentation are at a higher risk of being targeted for deportation unless they can secure an alternative form of legal status.
Christopher Lubin, an Amazon warehouse worker in Delaware, lost his job at the company on June 27, a day before Poteau received her notice.
“We have done everything legally in this country,” said Lubin, 24, who is also from Haiti. “We haven’t committed fraud. We go to school, we work, and we pay taxes.”
DHS said it was revoking protections for Haitian nationals after a review by Secretary Kristi Noem determined “country conditions have improved to the point where Haitians can return home in safety.”
The U.S. granted TPS for Haitian nationals following a catastrophic earthquake in 2008 that destroyed much of the nation’s infrastructure. In 2024, the TPS designation was extended through February 2026, as the country faced “rapidly deteriorating security, human rights and humanitarian” conditions, according to the United Nations Human Rights Council.
Armed gangs control the majority of Port-au-Prince and violence has spread beyond the capital in recent months. About 10 individuals from Haiti lost their jobs at an Amazon warehouse in Spokane, Washington, after DHS revoked the TPS program, said Katia Jasmin, executive director of Creole Resources, which provides support to Haitian immigrants in the region.
Serge, who asked to have his full name withheld out of fear of being targeted for deportation, came to the U.S. from Haiti nearly two years ago and secured a job at the Spokane warehouse as a packer. The situation in Haiti was dire when he left and it remains unsafe today, Serge said.
“I witnessed violence and trauma, including the loss of family members who were killed,” Serge said. “Others were displaced from their homes and are now homeless. I genuinely feared for my life.”
In desperation, he said he sought a safer future and secured a sponsor that allowed him to come to the U.S. legally. It’s “unjust” that Haitians are now being ordered to return to their home country when it’s plagued with violence, Serge said.
“We’re not just recipients of economic support,” he said. “We’re also contributors who help drive the economy.”
Tesla CEO Elon Musk attends an opening ceremony for Tesla China-made Model Y program in Shanghai, China, on Jan. 7, 2020.
Aly Song | Reuters
Tesla CEO Elon Musk said the company is expanding its robotaxi service area and bringing xAI’s Grok to vehicles as it rolled out a new iteration of the artificial intelligence chatbot.
Shares gained about 3%.
Musk said on X that Grok, his AI chatbot that praised Adolf Hitler and posted a barrage of antisemitic comments recently, will be available in Tesla vehicles “next week at the latest.”
xAI officially launched the Grok 4 update overnight as the company continued to face backlash for the vitriol written by the chatbot.
In response to a user post on his social media platform X, Musk said the company is expanding its Austin, Texas robotaxi service area this weekend. He also said Tesla is awaiting regulatory approval for a launch in the Bay Area “probably in a month or two.”
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The expansion of robotaxi and Grok integration comes at a fraught time for Musk and his empire.
Tesla set its annual shareholder meeting for Nov. 6, a Thursday filing showed. A group of investors recently called on the electric vehicle company to schedule the meeting.
Its last shareholder meeting was in June 2024, as Musk established himself as a major backer of President Donald Trump‘s reelection campaign. Musk later led the Trump administration’s Department of Government Efficiency, known as DOGE.
After stepping down from DOGE at the end of May, Musk has openly feuded with Trump on social media over the major tax bill, with the president suggesting the government look at cutting contracts for Musk’s companies.
Shares have tanked from their post-election high over investor concerns that the public fight could hamper Tesla. Slowing sales and rising competition also stifled some investor appetite.
Tesla shares fell Monday, with the company losing $68 billion in value after Musk continued to blast Trump’s “Big Beautiful Bill” and said he was establishing his own political party, the “America Party.”
The world’s richest man suffered another blow Wednesday when Linda Yaccarino stepped down as CEO of his social media platform X, leaving the role after a turbulent two years for the company.