Google value plunges by $500bn as AI fears rattle Wall Street
Summary
Alphabet shares fell nearly 13% on Thursday, and the company’s market value dropped by just over $500 billion after it reported that AI summaries were affecting search ad sales. Alphabet, Amazon and Microsoft all reported large AI-related investments, while investors weighed those costs against the companies’ core businesses and cash flow.Key Facts
- Alphabet’s market value fell from $3.97 trillion to $3.46 trillion.
- Alphabet revenue rose 25% year over year to $127.6 billion, while profit fell 25%.
- Alphabet reported negative free cash flow of more than $9 billion, which the article linked largely to AI investment.
- Google said AI summaries in search affected the number of ads it sold during the quarter.
- Google Cloud revenue grew 103% to nearly $31 billion.
- Amazon shares fell 6% in after-hours trading after it reported quarterly sales growth of 11% to $201 billion and negative cash flow of $42 billion.
- Microsoft shares fell less than 1%; its quarterly revenue grew 19% to $92.3 billion, and cloud revenue grew 30% to $63 billion.
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