Alphabet’s shares fell more than 13%, erasing more than $500 billion in its biggest-ever market plunge, after the company reported disappointing search and advertising sales that reinforced investor concerns about AI’s threat to its core business. The Google parent reported sales, excluding partner payouts, of $111.2 billion for the third quarter, falling short of analysts’ projections. Ad sales from search and other channels — a business line that accounts for roughly half of overall revenue and is critical to financing the massive AI investments — also missed forecasts, growing at the slowest pace in five quarters.
The results and share reaction “show us the margin for error when a hyperscaler spending hundreds of billions on the AI infrastructure buildout” posts disappointing results in its core business, JPMorgan analysts including Doug Anmuth said in a note.
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