[Google’s parent company Alphabet's share price dropped by nearly 5%, but still rose by more than 15% in 12 months] According to foreign media, Google’s parent company’s Alphabet (NASDAQ:GOOGL) share price fell sharply in the US stock market on Tuesday. %, after the company released its financial report for the first quarter of fiscal year 2018 on Monday. Wall Street analysts warned that the technology giant's profits in the near future may decline.

Compared to the same period of last year, Capital's capital spending in the first quarter tripled, highlighting the company’s investment in facilities and data centers. On the whole, Wall Street analysts are optimistic about this strategy, but they are paying close attention to Alphabet's profit.

Alphabet's stock price closed down 4.77% on Tuesday to $1022.64. According to CNBC data, its market value was $711.0 billion. It was surpassed by Microsoft and became the third largest market capitalization company in the world. Microsoft's share price closed down 2.34% to 93.12 US dollars, closing the market value of 717 billion US dollars, which exceeded the market value of Alphabet.

An analyst from Baird, an investment bank, wrote in a research report: "Alphabet's revenue exceeds expectations, and it is also making active investment activities. This is a good thing." But the report also pointed out that as Alphabet improved, With regard to research and development, real estate and employee expenses, the company’s profits will remain under pressure. "It is very important that we believe this is essential for innovation and for maintaining long-term growth."

Alphabet is expanding its investment in cloud computing, which means that the company will compete more directly with e-commerce giant Amazon (NASDAQ:AMZN). At the same time, this kind of investment also depicts the future development route of Alphabet other than the advertising business.

Analysts from Macquarie Securities pointed out in a research report: “Alphabet has very large long-term growth opportunities (search, YouTube, cloud services, automotive, health areas, etc.), and the company will carry out in these areas. This is definitely the right thing to do, and it will increase shareholder value in the long run." But the report also pointed out: "However, there is a key difference between Google's long-term opportunities and Amazon. Each of Google’s investment opportunities will have a lower structural profit margin than its core search business. In fact, every opportunity Amazon invests in has a structurally higher profit margin than the core ultra-low profit retail business.”

The fall on Tuesday caused the Alphabet stock price to be in a negative area in the transactions so far this year, but in the past 12 months, the stock has still risen more than 15% cumulatively.

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