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Google-parent Alphabet (GOOG, GOOGL) stock tumbled earlier this week after reporting slower-than-expected revenue growth for its cloud division. RBC Capital Markets Internet Analyst Brad Erickson sits down with Yahoo Finance anchor Rachelle Akuffo to talk about cloud technology's current influence on Big Tech earnings, particularly Meta (META).

"They have covered a lot more ground with money they have spent than people realized, they're not going to have to spend as much as people thought in 2024," Erickson says on Meta's building out of its facilities and AI infrastructure.

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

RACHELLE AKUFFO: --to see if it was unfairly punished, given how well the actual earnings report was about the focus on Cloud.

BRAD ERICKSON: Yeah, I got it. I would say so, the advertising business, we do a lot of channel checks in the ad space. We came in tactically constructive on the space where everybody hit numbers, or beat numbers, really, for Q3. Meta's guidance was fine for Q4, even including some impact they called out from the Middle East.

Google had an unfortunate quarter with The cloud business, and it brought everything else down. And with the Meta result on Wednesday, I think the takeaway there was, unfortunately, people were looking for any reason to sell the stocks, I think that's probably a reflection on the broader macro, where we think the consumer is going, but looking for an excuse to sell the stock almost, and just made it a tough week until today with Amazon fortunately.

RACHELLE AKUFFO: And so speaking of Meta then, obviously 2023, the year of efficiency seemingly paying off at the moment. Obviously, the metaverse play, if we look over the past five years, still seeing some losses there. What are your expectations then for 2024, based on some of the cuts we've already seen Meta making this year?

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BRAD ERICKSON: I think it's going to be a combination of things. And you point to three factors that really drive the operating expense guidance they gave, which was modestly better than expectations. Number one, is just in general around headcount costs, facilities costs, I think there the message is, 2024 is going to continue to be another year of efficiency, that's number one.

Number two is just on their capital expenditures, these are around building data centers, and buying servers, and, certainly, graphics processors in the age of generative AI. I think there, what we learned on the call, which was positive, was that they've covered a lot more ground with money they've already spent, I think, than people realize, and so they're not going to have to spend quite as much as people thought in 2024.

And then the last one is Metaverse. And I think there, we don't love the losses, investors don't love the losses. Obviously, they're clearly continuing to spend, but I think the takeaway, again, nets out positively in that Mark Zuckerberg and his team are clearly acquiescing to investors desires to keep it more reasonable, meaning balancing the growth with that spend, and you're netting out to still an attractive consolidated P&L.

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2024 could be 'another year of effiiciency' for Meta: Analyst - Yahoo Finance