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Investors Wary of Alphabet/Google's Billions in Capital Expenditures

posted by Fnord666 on Wednesday April 25 2018, @04:07PM   Printer-friendly
from the wake-up-call dept.

takyon writes:

Google's spending spree rattles Wall Street

Alphabet, the parent company of Google, racked up $7.7 billion in capital expenditures for the first three months of 2018 on everything from real estate to undersea cables.

The company reported strong growth in sales and profit for the quarter on Monday, fueled by the strength of its advertising business and helped by a lower tax rate. But its staggering investments appear to be rattling Wall Street. Google's stock fell as much as 5% in early trading Tuesday.

"The big story from the results was the significant rise in expenses," Brian Wieser, an analyst with Pivotal Research, wrote in an investor note Monday night.

Alphabet spent $2.4 billion in March to buy Cheslea Market in Manhattan to expand its office space in New York City. The company also said it invested in data centers, production equipment and undersea cables.

Also at Bloomberg and Reuters.

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  • (Score: 0) by Anonymous Coward on Thursday April 26 2018, @07:32PM

    by Anonymous Coward on Thursday April 26 2018, @07:32PM (#672281)

    It's about ROI: ROI declines if the amount of the investment increases without a corresponding increase in returns. Staggering investments require staggering returns, and Alphabet's ability to do that is what the Street is questioning.