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Google stock price crashes and wipes $500 billion off company amid panic over AI
The Independent • • general
Key Points:
- Alphabet's share price plunged over 12% on Thursday, wiping out $500 billion in value due to investor concerns about its AI investments and disappointing search advertising earnings.
- The company reported a $9.1 billion negative free cash flow last quarter, driven by heavy spending on AI development and cloud capacity expansion, marking its first negative cash flow in 22 years as a public company.
- Google Cloud revenues more than doubled to $30.71 billion, exceeding expectations, but advertising revenue fell short by $1.4 billion, fueling worries that AI integration in search has yet to translate into profit.
- Alphabet plans to increase its 2027 capital expenditures significantly, raising investor anxiety about continued cash burn amid intense competition in the AI and cloud sectors.
- Despite unveiling the new Gemini 4 Carbon AI model to assert leadership, analysts questioned whether Google rushed its deployment to offset weaker financial results and if the model is ready for commercial use.
