'We feel very good about our trajectory here' says Google as its stock tanks by $500 billion
News Source
β’Thu, 29 Oct 2026 17:09:36 +0000
π° What Happened
Google Search grew 12% and made $63.3 billion last quarter. Even so, the result was below what Wall Street expected. Parent company Alphabet's shares fell 13%, wiping $500 billion off its value.
Google's own AI features may be eating into search money. A senior vice president, Philipp Schindler, said strong growth in AI Mode queries brought in less money per query. The company is now putting more ads in AI Overviews and AI Mode.
Alphabet also reported negative cash flow of $9.1 billion at the end of September. It spent $51.3 billion on AI in the quarter alone and has committed to more than $1 trillion in data centres.
π The Backstory
Investors have been nervous about AI spending for months. About $1 trillion of value left AI-related stocks earlier this month. Google faces more competition for attention from chatbots like ChatGPT.
This is only the second quarter Google has reported negative cash flow since it went public in 2004. The company says its ad tests inside AI features look promising.
π― Why It Matters
Google earns most of its money from ads, which pay for free search and apps. If AI search earns less, Google may push more ads at users.
Google Search grew 12% and made $63.3 billion last quarter. Even so, the result was below what Wall Street expected. Parent company Alphabet's shares fell 13%, wiping $500 billion off its value.
Google's own AI features may be eating into search money. A senior vice president, Philipp Schindler, said strong growth in AI Mode queries brought in less money per query. The company is now putting more ads in AI Overviews and AI Mode.
Alphabet also reported negative cash flow of $9.1 billion at the end of September. It spent $51.3 billion on AI in the quarter alone and has committed to more than $1 trillion in data centres.
Investors have been nervous about AI spending for months. About $1 trillion of value left AI-related stocks earlier this month. Google faces more competition for attention from chatbots like ChatGPT.
This is only the second quarter Google has reported negative cash flow since it went public in 2004. The company says its ad tests inside AI features look promising.
Google earns most of its money from ads, which pay for free search and apps. If AI search earns less, Google may push more ads at users.