Big Tech brought in billions last quarter, but it wasn’t enough to please investors. Of the three largest ad platforms in the US, only Meta beat analyst expectations.
One common thread? Executives at Alphabet, Amazon, and Meta evangelized a future with even more AI, and said they’d spend a lot of money to get there. Alphabet, Google’s parent company, said it would invest $75 billion in capital expenditure including data centers that power AI, while Meta said it would spend about $65 billion on “generative AI efforts and our core business.” Amazon said, hold my beer, telling investors that it would spend more than $100 billion this year, with a focus on building out generative AI services.
Let’s dive into the numbers.
Amazon: The e-commerce juggernaut brought in $17.3 billion from ad sales in Q4, an 18% YoY increase, bringing its total 2024 ad revenue to $56.2 billion. Additionally, the company’s Q4 revenue surpassed Walmart’s quarterly revenue for the first time.
With all that said, its revenue outlook fell short of analyst expectations, and shares slipped.
Alphabet: The internet giant, which is still awaiting a ruling on its ad-tech antitrust case, brought in $72.4 billion in ad revenue from Google and YouTube in Q4, but a slowdown in cloud computing sales sent shares falling.
Meta: The company that owns Facebook and Instagram got a gold star for the quarter, beating analyst expectations. It brought in $46.7 billion in ad revenue for the quarter, and ended 2024 with ad revenue of $160 billion.
When asked on the company’s Q4 earnings call about its pullback from fact-checking, Meta CFO Susan Li said the company hasn’t “seen any noticeable impact from our content policy changes on advertiser spend.”
Warning signs? In December, advertising analyst Brian Wieser wrote that he expects US ad revenue to grow 4.5% this year, down from roughly 9% in 2024, citing concerns around tariffs and proposed restrictions on pharma advertising.
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