Alphabet (GOOG -1.01%) (GOOGL -1.14%) is well established as a tech leader and is one of the most valuable companies in the world. However, the stock is still vulnerable to the same kinds of macro-level risks as the rest of the stock market, and in February, a combination of weaker-than-expected revenue in its fourth-quarter earnings report and broader worries around the global economy sent the stock tumbling. By the end of the month, Alphabet had lost 17%, according to data provided by S&P Global Market Intelligence, erasing more than $300 billion in market value from the company.

As the chart below shows, the stock fell early in the month on the earnings report and at the end of February as part of a broader sell-off in the market.

^SPX data by YCharts

Q4 results underwhelm

For the fourth quarter, Alphabet's revenue grew 12% to $96.47 billion, though that was below estimates at $96.67 billion. It was also notably slower than rival Meta Platforms' growth, showing that the Google parent appears to be losing market share to its largest digital advertising competitor. The figure also represented a slowdown from earlier in the year.

On the bottom line, earnings per share rose from $1.64 to $2.15, which was slightly ahead of the consensus at $2.13.

Alphabet doesn't give full guidance, but investors seemed skeptical about its plans to ramp up capital expenditures to $75 billion in 2025 from $52.4 billion in 2024 to invest in artificial intelligence (AI) infrastructure as it's not clear that that's currently driving significant revenue for the company.

Later in the month, Alphabet pulled back again in line with a broader sell-off in the market on macro and tech sector issues. Tech stocks fell on reports that Microsoft was canceling some data center leases, and after Nvidia stock sold off in spite of solid earnings report, indicating that investors may believe that AI stocks had gotten overvalued.

Additionally, tariff threats seemed to push stock lower. Google also announced job cuts in its cloud division, which could improve profits, but may also be a sign of slowing growth.

Image source: Getty Images.

What's next for Alphabet

As the leader in digital advertising, Alphabet is sensitive to global economic growth and business spending, and in a recession, companies tend to cut back on advertising spending first so investors should expect the stock to move on macro news.

Additionally, while the company has stood its ground in the AI race, there is still some concern that its search leadership is vulnerable to competition from OpenAI and others.

However, those concerns seem priced in and the stock looks cheap at a price-to-earnings ratio of just 21.5. If Alphabet can maintain its current growth rate, the stock should move higher from here.