Stocks declined on Wednesday as Alphabet Inc. Class A(GOOGL.US) and Advanced Micro Devices, Inc.(AMD.US)'s mixed quarterly reports dragged down the tech sector.

Alphabet shares plummeted due to a cloud revenue miss as it invests in AI, causing investor concerns about the company's ability to capitalize on its AI ambitions.

Despite this, big-cap tech companies still have options to cut costs, shore up balance sheets, and conduct big buybacks. However, they must also increase spending and hiring as the profit story is not the same as it used to be.

Here are the details. 

01

Alphabet Inc. Class A(GOOGL.US)

Alphabet Inc. Class A(GOOGL.US) shares fell 7% as of 17:44 Riyadh time. 

The parent company Alphabet reported fourth-quarter revenue of approximately US$96.47 billion, marking an 11.8% year-on-year increase but slightly missing analysts' expectations of US$96.573 billion. Earnings per share were US$2.15, up 31.1% from the previous year, and exceeding the anticipated US$2.13.

During the period, revenue from Google's cloud business was US$11.955 billion, with year-on-year growth slowing from 35% in the third quarter to about 30%, falling short of market expectations of US$12.155 billion. Additionally, Alphabet projected its 2025 capital expenditures to reach US$75 billion, a 42.7% increase from the prior year and significantly higher than analysts' forecast of US$57.9 billion.

02

Advanced Micro Devices, Inc.(AMD.US)

Advanced Micro Devices, Inc.(AMD.US) shares dropped nearly 10% as of 17:44 Riyadh time. 

The company reported a 24% year-on-year increase in fourth-quarter revenue to US$7.66 billion, a new high, surpassing market expectations of US$7.54 billion. Adjusted earnings per share were US$1.09, meeting market predictions.

AMD's data centre segment revenue soared 68% year-on-year to US$3.9 billion, also a record high, but fell short of analysts' estimates of US$4.097 billion. The client segment, which includes PC chips, saw a 58% year-on-year revenue increase to US$2.3 billion, hitting a new high and exceeding expectations.

03

Uber Technologies,Inc.(UBER.US) 

Uber Technologies,Inc.(UBER.US) released its fourth-quarter and full-year earnings for the period ending December 31, 2024. 

In Q4, UBER reported revenue of US$11.959 billion, a 20% year-on-year increase. Net income attributable to UBER was US$6.883 billion, compared to US$1.429 billion in the same quarter last year.

For the entire year of 2024, UBER achieved revenue of US$43.978 billion, up 18% year-on-year. Net income attributable to UBER was US$9.856 billion, significantly higher than the US$1.887 billion recorded the previous year.

CEO Dara Khosrowshahi commented that UBER experienced its strongest quarter ever at the end of 2024, driven by accelerated growth in monthly active users, trip volume, and total orders. He attributed the success to rapid innovation and execution of several priorities, including the significant opportunities presented by autonomous vehicles. 

Khosrowshahi noted that UBER is entering 2025 with strong momentum and remains focused on its long-term strategy.

Despite surpassing analysts' expectations for Q4 revenue and earnings per share, UBER's pre-market share price fell approximately 6% due to relatively subdued forecasts for the first quarter of 2025.

04

Novo Nordisk A/S Sponsored ADR Class B(NVO.US)

Novo Nordisk A/S Sponsored ADR Class B(NVO.US) shares dropped nearly 4% as of 17:44 Riyadh time. 

Danish pharmaceutical company Novo Nordisk reported its 2024 financial results. 

The company achieved annual revenue of DKK 290.403 billion (approximately US$40.5 billion), marking a 25% increase year-on-year, or 26% at constant exchange rates. 

Operating profit was DKK 128.339 billion (around US$17.9 billion), up 25%, or 26% at constant exchange rates. 

Net profit came in at DKK 100.988 billion (about US$14.1 billion), a 21% year-on-year rise.

In its third-quarter report for 2024, Novo Nordisk projected an annual sales growth of 23% to 27% at constant exchange rates. The actual revenue aligns with this forecast range, driven largely by the sales of its flagship product, semaglutide.

The report highlighted that the diabetes injectable Ozempic saw sales of DKK 120.342 billion in 2024, a 26% year-on-year increase. Oral semaglutide Rybelsus posted sales of DKK 23.301 billion, also up 26%. The weight loss injection Wegovy recorded a remarkable 86% increase in sales to DKK 58.206 billion (approximately US$8.1 billion).

Collectively, these three semaglutide products contributed DKK 201.849 billion (around US$28.1 billion) to Novo Nordisk's annual revenue. The strong performance of semaglutide products has led industry experts to speculate that it could soon surpass Merck & Co., Inc.(MRK.US)’s Keytruda as the top-selling drug in the global pharmaceutical market. 

According to Merck & Co.'s recent financial report, Keytruda generated US$29.482 billion in sales in 2024, indicating that the gap between semaglutide and Keytruda is narrowing, bringing semaglutide closer to the top position in the industry.