Alphabet’s stock falls after reporting slowing revenue growth

Alphabet, Google’s holding company, reported slowing growth in the first quarter, and missed analyst expectations on revenues.

The company reported $36.34 billion in revenue, most of it from Google’s many-pronged advertising business. Analysts had expected $37.32 billion.

Alphabet’s first quarter revenue grew only 17% from last year. First quarter revenues in 2018 grew 26%.

The company’s stock fell about 3% on the news in after-hours trading. By the end of Alphabet’s call with analysts, the stock had fallen 7%.

The Google advertising business brought in %30.7 billion, compared to $26.4 billion in the same quarter last year. Its search business shelled out $6.86 billion in traffic acquisition costs, slightly less than the $7.26 billion analysts expected it to pay.

Alphabet’s “other bets” category, which includes the self-driving car company Waymo and the digital health company Verily, generated a small $170 million of profit. Its “other revenues” operations, which includes Google’s hardware business (phones, speakers, laptops, etc.) and its cloud services business, delivered $5.45 billion in revenue, a 25% uptick from last year. “It’s still early in our hardware journey,” said Google CEO Sundar Pichai during the conference call.

Apple, Amazon, and Microsoft have all hit trillion-dollar valuations, and many expect Google to hit that mark as well. Eventually, not today.