Alphabet's stock experienced its worst-ever day, plummeting over 12% and erasing approximately $500 billion in market value following the company's third-quarter earnings report. The significant drop occurred after Alphabet revealed that its core Google Search business now accounts for less than 50% of its total revenue and that its "AI mode" has negatively impacted traditional search monetization.
Despite YouTube Premium and Music subscribers surpassing 150 million globally and YouTube's ad revenue increasing by 9% year-over-year to $11.2 billion, these gains were overshadowed by broader financial concerns. Alphabet's overall third-quarter revenue of $127.6 billion, while up 25% from the previous year, fell short of Wall Street's expectations, with growth rates also lagging behind the booming Google Cloud division. The company acknowledged that its AI search initiatives are currently generating less revenue, though it is actively working to address this through increased advertising.
Alphabet Stock Plummets $500 Billion After Q3 Earnings Miss
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Sources
- Alphabet’s brutal day on the stock market — Financial Times - Technology,
- Google owner Alphabet suffers its worst-ever day on stock market as value plunges $500bn — Reddit - Technology,
- For the first time ever, Google Search is less than 50% of Alphabet's revenue — Hacker News - Official RSS,
- Google admits AI search makes less money, but it's fixing that with more ads — Ars Technica,
- Google owner Alphabet suffers worst-ever day - as value plunges $500bn — Sky News World,
- Google expands AI Search ads globally as core ad growth slows — TechCrunch,
- YouTube Ad Revenue Rises 9% But Parent Alphabet Misses Wall Street’s Q3 Targets; Stock Drops — Deadline,
- YouTube Premium and Music Subscribers Pass 150 Million as Ad Revenue Tops $11 Billion in Q3 — The Hollywood Reporter,
- YouTube Q3 Ad Revenue Growth Slows, Rising 9% to $11.2 Billion, as Alphabet Misses Earnings Estimates — Variety,