Oct. 30 (UPI) — The value of Alphabet, the parent company of Google, plunged by $510 billion amid a sell-off of the firm’s stock after it reported weaker-than-expected earnings in the July to September quarter and slowing growth of its advertising and search businesses.
The shares ended Thursday down 12.6% after the firm sent shockwaves through the market by reporting lower than expected revenue from weak advertising sales, which it admitted were being impacted by its default “AI search mode,” as well as AI investment of more than $50 billion that meant it spent $9.1 billion more than it brought in.
Thursday’s sell-off, which saw the Nasdaq-listed firm’s total market capitalization fall to $3.46 trillion, down from $3.97 trillion on Wednesday, was the worst one-day performance in the company’s history and the second worst ever of the U.S. market after chipmaker Nvidia, which saw $589 million erased from its value in a Jan. 27, 2025, rout.
The Alphabet news helped wipe 1.4% from the Nasdaq Composite Index, which ended the day at 26,184.72 points, and depressed the S&P 500 and Dow Jones Industrial Average to a lesser extent, while similarly gloomy results from Amazon and Intel after the close saw investors pivot into U.S. Treasuries, lowering government borrowing costs.
Investors were told that Google’s own “AI Mode” search feature was part of the reason for the slowdown in ad sales, negatively impacting the contribution to revenue from advertising — Google’s core business — despite a 25% rise in total revenue to $127.6 billion, compared with the same period in 2025.
Overall revenue was supported by a more than doubling of revenue generated by Google Cloud to just under $31 billion, beating market expectations, but profit for the quarter fell 25% to $26.2 billion, down from $35 billion in 2025.
Alphabet Senior Vice President Philipp Schindler said the company was working to address the impact from its AI search function, which, while it had seen strong growth in use, had “lower monetization.”
“We feel very good about our trajectory here. Our ad experiments have shown promising results and we’re now scaling ads within both AI Overviews and AI Mode to more users and more queries, including more international users and more multi-turn ads in the United States,” Schindler said in an earnings call with investors.
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Oct. 30 (UPI) — The value of Alphabet, the parent company of Google, plunged by $510 billion amid a sell-off of the firm’s stock after it reported weaker-than-expected earnings in the July to September quarter and slowing growth of its advertising and search businesses.
The shares ended Thursday down 12.6% after the firm sent shockwaves through the market by reporting lower than expected revenue from weak advertising sales, which it admitted were being impacted by its default “AI search mode,” as well as AI investment of more than $50 billion that meant it spent $9.1 billion more than it brought in.
Thursday’s sell-off, which saw the Nasdaq-listed firm’s total market capitalization fall to $3.46 trillion, down from $3.97 trillion on Wednesday, was the worst one-day performance in the company’s history and the second worst ever of the U.S. market after chipmaker Nvidia, which saw $589 million erased from its value in a Jan. 27, 2025, rout.
The Alphabet news helped wipe 1.4% from the Nasdaq Composite Index, which ended the day at 26,184.72 points, and depressed the S&P 500 and Dow Jones Industrial Average to a lesser extent, while similarly gloomy results from Amazon and Intel after the close saw investors pivot into U.S. Treasuries, lowering government borrowing costs.
Investors were told that Google’s own “AI Mode” search feature was part of the reason for the slowdown in ad sales, negatively impacting the contribution to revenue from advertising — Google’s core business — despite a 25% rise in total revenue to $127.6 billion, compared with the same period in 2025.
Overall revenue was supported by a more than doubling of revenue generated by Google Cloud to just under $31 billion, beating market expectations, but profit for the quarter fell 25% to $26.2 billion, down from $35 billion in 2025.
Alphabet Senior Vice President Philipp Schindler said the company was working to address the impact from its AI search function, which, while it had seen strong growth in use, had “lower monetization.”
“We feel very good about our trajectory here. Our ad experiments have shown promising results and we’re now scaling ads within both AI Overviews and AI Mode to more users and more queries, including more international users and more multi-turn ads in the United States,” Schindler said in an earnings call with investors.
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