Alphabet Loses $500bn Value as AI Ad Revenue Drops
· Business · BBC News
Alphabet lost over $500bn in market value after its AI search summaries hurt ad sales, sending its stock to a six-month low. The company reported 25% revenue growth to $127.6bn but profits fell 25% with negative free cash flow exceeding $9bn, almost double the previous quarter. Spending on AI is eating into core business lines, particularly Google Search's ad revenue, despite cloud revenue surging 103% to $31bn. Microsoft and Amazon also updated investors this week, committing to heavy AI spending amid investor concerns about growth sustainability.
Why it matters
Investors are worried that massive AI spending will slow growth of established businesses like Google Search, directly impacting Alphabet's dominant ad business and stock valuation.
Read the original report — BBC News
Join us on Telegram
Breaking news the moment it lands. At 10,000 members we ship the Android app.