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Google, Reddit, and more tech stocks plummet: What’s driving market shocks

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Google, Reddit, and more tech stocks plummet: What’s driving market shocks

Tech stocks are taking a big hit on the stock market today, and they really only have themselves to blame.

Just look at Google and Reddit's plummeting stocks. On Thursday, Google stock experienced its largest single-day drop ever, and Reddit is on track to have its worst-ever day on Friday. Other tech stocks are also down Friday. As of this writing, Intel is down 30 percent. NVIDIA is down almost 5 percent.

So, what's going on? The answer to this shouldn't surprise anyone: It's AI.

On a Q3 earnings call earlier this week, Google reported strong revenue growth, although weaker than expectations. However, in an earnings filing on Thursday, Google revealed that the company has substantially more exposure to AI risk than some investors realized, according to a Bloomberg report. For one, Google has now disclosed that in addition to its $1 trillion in future purchase commitments, it faces an additional $98 billion in possible future purchase commitments.

These commitments consist mainly of AI data centers and related computing power and hardware, Bloomberg reports. Basically, the company has a lot riding on the AI boom not going bust.

That's not the only concern either. Google's AI features are hurting one of the company's biggest moneymakers, Google Search advertising revenue.

According to Google's chief business officer Philipp Schindler, fewer users are clicking on Google ads in search because of features like AI mode. In fact, even though Google is currently experiencing more search queries than it has in the past five years, Google Search revenue growth is slowing due to these AI tools.


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