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Alphabet shares sink after cloud growth stalls and spending surges

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Alphabet shares sink after cloud growth stalls and spending surges

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Alphabet shares dropped sharply after slowing growth in the Google parent’s cloud business and plans to spend $75bn this year on building capacity for artificial intelligence products unnerved investors.

Alphabet late on Tuesday reported double-digit increases in fourth-quarter revenues and profits, driven by its core advertising business. But investors homed in on a disappointing quarter for its vast cloud unit, which runs Google’s data centres.

The cloud division posted a 30 per cent increase in revenues to almost $12bn, but this was slower than the 35 per cent growth rate in the previous three months, and below the $12.2bn analysts had forecast. Chief financial officer Anat Ashkenazi blamed this on “more demand than we had available capacity”.

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However, the scale of Google’s AI-related spending to meet this demand surprised the market. Fourth-quarter capital expenditure jumped to $14.3bn, up from $11bn last year and exceeding expectations for $13.2bn.

Google’s chief executive Sundar Pichai said spending on data centres and servers would accelerate to $75bn this year, up from $53bn in 2024 and a third more than Wall Street had estimated.

“The cost of actually using [AI] is going to keep coming down, which will make more extraordinary use cases feasible,” Pichai said, denying that the company was spending profligately. “That’s the opportunity space. It’s as big as it comes, and that’s why you’re seeing us invest to meet that moment.”

Alphabet shares dropped 8 per cent in New York morning trading on Wednesday, leaving it on track for the fifth-worst trading day in the past decade and wiping about $200bn from its market capitalisation. Still, the stock had previously risen 45 per cent in the past 12 months, valuing it at $2.5tn behind only Apple, Microsoft, Nvidia and Amazon.

Alphabet’s fall echoed that of Microsoft last week, which also lost $200bn in market value after it also missed cloud growth estimates and said AI spending would reach $80bn in its fiscal year ending on June 30. The same day, Meta’s chief executive Mark Zuckerberg vowed to spend “hundreds of billions” more to stay in the vanguard of AI research.

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The market reaction reflects broader concerns about spending at US groups that build and operate the vast data centres filled with advanced chips that they claim are needed to train and run AI’s large-language models.

The Alphabet sell-off also builds on doubts sown last month by a new model from Chinese start-up DeepSeek, which claimed to achieve comparable performance to US AI leaders including Google’s Gemini, OpenAI’s ChatGPT and Anthropic’s Claude on a shoestring budget using far fewer advanced Nvidia chips.

Pichai said DeepSeek had a “tremendous team” that had shown “you can drive a lot of efficiency to serve these [AI] models really well”.

He also fielded analysts’ questions about whether Gemini and its rivals were cannibalising its core search business, as users increasingly use chatbots to find information and answers online, obviating the need to click on the advertisements that support its free service.

There is little evidence of its dominant search engine being challenged yet. Search-linked ad revenue rose 13 per cent to $54bn in the quarter, beating estimates, supported by another quarter of ad growth at YouTube.

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Overall, group revenue rose 12 per cent to $96.5bn in the fourth quarter compared with the same three-month period a year earlier. Excluding traffic acquisition costs paid to advertising and device partners, that figure was $81.6bn, missing Wall Street estimates of $82.8bn in a Bloomberg poll. Net income rose 28 per cent to $26.5bn.

Google is also in the crosshairs of regulators around the world. The company faces the prospect of being broken up after losing a landmark case brought by the US Department of Justice, which resulted in a ruling that its search business had engaged in monopolistic behaviour.

This week it emerged that China had revived antitrust investigations into Google’s Android mobile operating system, raiding its Beijing office in a move that has been interpreted as leverage in tariff negotiations with US President Donald Trump.

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‘Music makes everything better’: A Texas doctor spins vinyl to give patients relief

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‘Music makes everything better’: A Texas doctor spins vinyl to give patients relief

Dr. Tyler Jorgensen sets “A Charlie Brown Christmas” on a record player at Dell Seton Medical Center in Austin Texas. He uses vinyl records as a form of music therapy for palliative care patients.

Lorianne Willett/KUT News


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Lorianne Willett/KUT News

AUSTIN, TEXAS — Lying in her bed at Dell Seton Medical Center at the University of Texas at Austin, 64-year-old Pamela Mansfield sways her feet to the rhythm of George Jones’ “She Thinks I Still Care.” Mansfield is still recovering much of her mobility after a recent neck surgery, but she finds a way to move to the music floating from a record player that was wheeled into her room.

“Seems to be the worst part is the stiffness in my ankles and the no feeling in the hands,” she says. “But music makes everything better.”

The record player is courtesy of the ATX-VINyL program, a project dreamed up by Dr. Tyler Jorgensen to bring music to the bedside of patients dealing with difficult diagnoses and treatments. He collaborates with a team of volunteers who wheel the player on a cart to patients’ rooms, along with a selection of records in their favorite genres.

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“I think of this record player as a time machine,” he said. “You know, something starts spinning — an old, familiar song on a record player — and now you’re back at home, you’re out of the hospital, you’re with your family, you’re with your loved ones.”

UT Public Health Sophomore Daniela Vargas pushes a cart through Dell Seton Medical Center on December 9, 2025. The ATX VINyL program is designed to bring volunteers in to play music for patients in the hospital, and Vargas participates as the head volunteer. Lorianne Willett/KUT News

Daniela Vargas, a volunteer for the ATX-VINyL program, wheels a record player to the hospital room of a palliative care patient in Austin, Texas.

Lorianne Willett/KUT News


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The healing power of Country music… and Thin Lizzy

Mansfield wanted to hear country music: Willie Nelson, Merle Haggard, George Jones. That genre reminds her of listening to records with her parents, who helped form her taste in music. Almost as soon as the first record spins, she starts cracking jokes.

“I have great taste in music. Men, on the other hand … ehhh. I think my picker’s broken,” she says.

Other patients ask for jazz, R&B or holiday records.

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The man who gave Jorgensen the idea for ATX-VINyL loved classic rock. That was around three years ago, when Jorgensen, a long-time emergency medicine physician, began a fellowship in palliative care — a specialty aimed at improving quality of life for people with serious conditions, including terminal illnesses.

Shortly after he began the fellowship, he says he struggled to connect with a particular patient.

“I couldn’t draw this man out, and I felt like he was really struggling and suffering,” Jorgensen said.

He had the idea to try playing the patient some music.

He went with “The Boys Are Back in Town,” by the 1970s Irish rock group Thin Lizzy, and saw an immediate change in the patient.

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“He was telling me old stories about his life. He was getting more honest and vulnerable about the health challenges he was facing,” Jorgensen said. “And it just struck me that all this time I’ve been practicing medicine, there’s such a powerful tool that is almost universal to the human experience, which is music, and I’ve never tapped into it.”

Dr. Tyler Jorgensen, a palliative care doctor at Dell Seton Medical Center, holds a Willie Nelson album in an office on December 9, 2025. Ferguson said patients have been increasingly requesting country music and they had to source that genre specifically.

Dr. Tyler Jorgensen plays vinyl records as a form of music therapy for palliative care patients in Austin, Texas. Willie Nelson’s albums are a perennial hit.

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Creating new memories

Jorgensen realized records could lift the spirits of patients dealing with heavy circumstances in hospital spaces that are often aesthetically bare. And he thought vinyl would offer a more personal touch than streaming a digital track through a smartphone or speaker.

“There’s just something inherently warm about the friction of a record — the pops, the scratches,” he said. “It sort of resonates through the wooden record player, and it just feels different.”

Since then, he has built up a collection of 60 records and counting at the hospital. The most-requested album, by a landslide, is Fleetwood Mac’s Rumours from 1977. Willie is also popular, along with Etta James and John Denver. And around the holidays, the Vince Guaraldi Trio’s A Charlie Brown Christmas gets a lot of spins.

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These days, it’s often a volunteer who rolls the record player from room to room after consulting nursing staff about patients and family members who are struggling and could use a visit.

Daniela Vargas, the UT Austin pre-med undergraduate who heads up the volunteer cohort, became passionate about music therapy years ago when she and her sister began playing violin for isolated patients during the COVID-19 pandemic. She said she sees similar benefits when she curates a collection of records for a patient today.

“We are usually not in the room for the entire time, so it’s a more intimate experience for the patient or family, but being able to interact with the patient in the beginning and at the end can be really transformative,” Vargas said.

Often, the palliative care patients visited by ATX-VINyL are near the end of life.

Jorgensen feels that the record player provides an interruption of the heaviness those patients and their families are experiencing. Suddenly, it’s possible to create a new, positive shared experience at a profoundly difficult time.

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“Now you’re sort of looking at it together and thinking, ‘What are we going to do with this thing? Let’s play something for Mom, let’s play something for Dad.’” he said. “And you are creating a new, positive, shared experience in the setting of something that can otherwise be very sad, very heavy.”

Other patients, like Pamela Mansfield, are working painstakingly toward recovery.

She has had six neck surgeries since April, when she had a serious fall. But on the day she listened to the George Jones album, she had a small victory to celebrate: She stood up for three minutes, a record since her most recent surgery.

With the record spinning, she couldn’t help but think about the victories she’s still pursuing.

“It’s motivating,” she said. “Me and my broom could dance really well to some of this stuff.”

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Video: Who Is Trying to Replace Planned Parenthood?

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Video: Who Is Trying to Replace Planned Parenthood?

new video loaded: Who Is Trying to Replace Planned Parenthood?

As efforts to defund Planned Parenthood lead to the closure of some of its locations, Christian-based clinics that try to dissuade abortions are aiming to fill the gap in women‘s health care. Our reporter Caroline Kitchener describes how this change is playing out in Ames, Iowa.

By Caroline Kitchener, Melanie Bencosme, Karen Hanley, June Kim and Pierre Kattar

December 22, 2025

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Weather tracker: Further flood watches issued across California

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Weather tracker: Further flood watches issued across California

After prolonged heavy rainfall and devastating flooding across the Pacific north-west in the past few weeks, further flood watches have been issued across California through this week.

With 50-75mm (2-3in) of rainfall already reported across northern California this weekend, a series of atmospheric rivers will continue to bring periods of heavy rain and mountain snow across the northern and central parts of the state, with flood watches extending until Friday.

Cumulative rainfall totals are expected to widely exceed 50mm (2in) across a vast swathe of California by Boxing Day, but with totals around 200-300mm (8-12in) possible for the north-western corner of California and western-facing slopes of the northern Sierra Nevada mountains.

Los Angeles could receive 100-150mm (4-6in) of rainfall between Christmas Eve and Christmas Day, which could make it one of the wettest Christmases on record for the city. River and urban flooding are likely – particularly where there is run-off from high ground – with additional risks of mudslides and rockslides in mountain and foothill areas.

Winter storm warnings are also in effect for Yosemite national park, with the potential for 1.8-2.4 metres (6-8ft) of accumulating snow by Boxing Day. Heavy snow alongside strong winds will make travel very difficult over the festive period.

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Golden Gate Bridge is covered with dense fog near Fort Point as rainy weather and an atmospheric river hit the San Francisco Bay Area on Saturday. Photograph: Anadolu/Getty Images

Heavy rain, lightning and strong winds are forecast across large parts of Zimbabwe leading up to Christmas. A level 2 weather warning has been issued by the Meteorological Services Department from Sunday 21 December to Wednesday 24 December. Some areas are expected to see more than 50mm of rainfall within a 24-hour period. The rain will be accompanied by hail, frequent lightning, and strong winds. These conditions have been attributed to the interaction between warm, moist air with low-pressure systems over the western and northern parts of the country.

Australia will see some large variations in temperatures over the festive period. Sydney, which is experiencing temperatures above 40C, is expected to tumble down to about 22C by Christmas Day, about 5C below average for this time of year. Perth is going to see temperatures gradually creep up, reaching a peak of 40C around Christmas Day. This is about 10C above average for this time of year.

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