CONNECT WITH US
Social Media

Social Media

Google value plunges by $500bn as AI fears rattle Wall Street

BBC News – Social Media logo

Published on

Add as a preferred source on Google
Google value plunges by $500bn as AI fears rattle Wall Street

Google CEO Sundar Pichai has backed the company's massive spending on AI.

Google parent Alphabet lost just over $500bn (£374bn) in value on Thursday after it rattled Wall Street with its last update of the year on its business operations.

Google spooked investors so badly that its stock hit a six-month low, after it revealed its artificial intelligence (AI) summaries on search were affecting ad revenue.

Microsoft and Amazon also updated investors this week, and joined Google in plans to keep spending astronomical sums of cash in an ongoing AI race.

But investors appeared dismayed at the impacts these plans are having on the ability of each to keep growing their core lines of business.

At first glance, the quarterly results of Alphabet, the parent company of Google, were not at all bad.

Total revenue grew 25% compared to last year, hitting $127.6bn. It was buoyed by the ongoing success of Google Cloud, where revenue grew by 103% to almost $31bn.

However, profits at the company fell by a considerable 25% during the quarter. And for the second time in its history as a public company, it showed negative free cash flow, this time in excess of $9bn. That's almost twice the loss of cash Alphabet showed just three months ago.

Cash flow represents the money a company retains after paying for operations and investments, meaning Alphabet is now spending more money than it is bringing in. That new level of spending is almost entirely dedicated to Google's AI investments.



Source link
Related Topics:Social Media

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.