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  • Google Cloud generated $3.8 billion in revenue in Q4 and $13 billion in annual revenue it reported Tuesday.
  • Alphabet is investing heavily in Google Cloud’s business, and the growth appears strong, analysts say. 
  • Still, they don’t expect Google to catch up to Amazon Web Services and Microsoft in the short term.

Google is bullish about its cloud business, and investing heavily as a result. But while Google Cloud growth is strong, analysts say, it still lags far behind its top rivals Amazon and Microsoft. 

Google announced Tuesday that Google Cloud generated $3.8 billion in revenue in Q4, a 47% increase from the same time the year before, and $13 billion in annual revenue, up 46% from 2019.

The unit is far from profitable – reporting a loss of $1.2 billion in the fourth quarter and $5.6 billion annually in 2020 – that’s not necessarily surprising, says John Dinsdale, chief analyst at Synergy Research Group. Businesses like Google Cloud require significant upfront investment and buildout of infrastructure, so they may not even break even for a long while, Dinsdale says. For example, Amazon Web Services launched in 2002, but Amazon didn’t break out AWS numbers until 2015, when it revealed that its cloud business was profitable

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