Alphabet missed analyst estimates for third-quarter revenue and earnings per share, and its shares were falling. Investors fear that artificial intelligence is pressuring the company's core search-engine business, even as cloud revenue doubled.
Shares of Alphabet were falling hard after the company reported a third-quarter revenue and earnings miss late on Wednesday. The results stoked fears that AI is pressuring its search business.
Overall revenue grew 25% from a year before to $127.6 billion, short of the $128.0 billion analysts expected.
Google stock could see its worst drop in years, according to MarketWatch.
Earnings per share of $2.12 trailed Wall Street consensus estimates of $3.02. A $8.6 billion paper loss on equity stakes drove the shortfall, which the company attributed to its investment in SpaceX.
Alphabet's $51.4 billion AI spending spree led to negative free cash flow of $9.1 billion.
A doubling of cloud revenue wasn't enough to appease Wall Street, as investors grow more concerned that AI is hurting the company's ability to make money off search queries.
Source: MarketWatch (snippet-based)
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