Alphabet shares tumble on weak revenue

Published: May 01, 2019 16:48:56 | Updated: May 03, 2019 14:33:58

File photo (Collected)

Alphabet shares plunged on Tuesday after the company posted weaker revenue in the first quarter.

Shares of Google's parent company plunged 7.5 per cent to close at $1,198.96 dollars apiece after decreasing as much as 8.7 per cent at its low.

The stock finished the session with its biggest percentage decline in more than six years, reports Xinhua.

The multinational conglomerate company was among the worst performers in the S&P 500 index, which climbed 0.1 per cent on Tuesday.

The S&P 500 communication services sector slid 2.56 per cent, largely dragged down by the poor performance of Alphabet shares.

Tuesday's steep sell-off caused the company to erase about $67 billion in market cap, according to figures from financial data research platform YCharts.

The US tech giant on late Monday posted a year-on-year increase of 17 per cent of revenue to $36.3 billion for the Q1 ending on March 31, compared to the same period last year, missing the market expectation of $37.33 billion.

The weaker revenue was mainly driven by decelerating ad sales growth at Google, according to the company.

Some brokerages downgraded their ratings of the stock after the downbeat earnings results.

Stifel downgraded Google's parent company to "hold" from "buy" and maintained a price target of 1,287 dollars.

In a note to investors, Stifel analyst Scott Devitt said the "unexpected degree of revenue deceleration" may make hurt Alphabet's valuation growth over the next year.

Despite Tuesday's nosedive, the stock has still gained more than 14 per cent this year.

Alphabet is among the some 150 S&P 500 companies that are scheduled to release quarterly earnings this week.

More than half of the S&P 500 companies have reported so far and 77 per cent of them have topped analyst expectations, according to Refinitiv.

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