Shares of Google took a hit on Wall Street on Wednesday, dropping over seven percent after the company reported its latest quarterly earnings, which revealed stagnant growth in its cloud services and significant spending. Just minutes into trading in New York, Alphabet, Google's parent company, saw its shares fall by 7.16 percent. 

While Google Cloud's revenue grew by 30 percent to reach $12 billion, it still missed expectations, sparking concerns about its competitiveness in the fast-paced AI infrastructure market. Additionally, Alphabet revealed plans to invest around $75 billion in capital expenditures for 2025, a figure that caught analysts off guard and underscored the rising costs associated with AI development. 

Google and its competitors are pouring billions into data centers and AI initiatives, but they're still waiting for substantial returns on these investments. The emergence of lower-cost models like DeepSeek from China is also raising questions about the necessity of such high spending.