Google erases a record $500 billion as AI eats into sales
The company's reported disappointing search and advertising sales have reinforced investor concerns about AI's threat to its core business.
Alphabet's shares plummeted more than 13%, marking a market loss exceeding $500 billion, following the company's release of underwhelming search and advertising sales figures. This marked the largest single-day drop in Alphabet's history. The tech giant's parent company, Google, disclosed third-quarter sales (excluding partner payouts) totaling $111.2 billion, which fell below market expectations.
Revenue from search and other advertising channels, which constitute roughly half of Google's total earnings and are crucial for funding its extensive AI investments, also underperformed, growing at the slowest rate in five quarters. The disappointing results and the subsequent impact on Alphabet's stock price underscore the significant risks and uncertainties that arise when a major technology firm like Google invests billions in AI infrastructure development, according to analysts at JPMorgan, including Doug Anmuth.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
