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Alphabet Loses $500 Billion in Market Value as AI Threatens Google Search

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Alphabet Loses $500 Billion in Market Value as AI Threatens Google Search

Google parent company Alphabet saw its stock price drop 13%, and its market value lose $500 billion Thursday (Oct. 29), marking the stock’s worst day ever, the Wall Street Journal reported Thursday.

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The drop followed Alphabet’s release of its quarterly results on Wednesday (Oct. 28), which stoked investors’ fears about how the company is being impacted by the rise of artificial intelligence (AI), according to the report.

Those results showed that the growth of Google Search revenue slowed to 12% year over year in the third quarter, down from 17% in the third quarter, suggesting that consumers are turning to AI chatbots instead of the company’s search engine as they look for products, the report said.

Alphabet’s third quarter results also showed higher-than-expected operating expenses and negative free cash flow, which the WSJ attributed to the company’s spending on AI models and data centers.

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Bloomberg reported Thursday that Alphabet’s third quarter sales of $111.2 billion were less than analysts had expected and that the company’s ad sales grew at the slowest pace in five quarters.

The report also said that Alphabet’s future obligations to buy data centers, computing power, energy and other resources have surpassed $1 trillion.

Alphabet reported negative free cash flow for two quarters in a row, after having never done so since going public, according to the report.


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