Part of The AI Chip Bubble · 12 stories · since Oct 14 · newest 4d ago
Alphabet's AI-search stumble triggers record stock rout, drags Amazon and IntelAlphabet drops 10% in premarket trading
2 Oct 29 4:35 AM · 10d ago · 32 articles · 1 video · 5 posts · 17 comments · 6 sources · development 2 of 7
Shares fell in premarket after Alphabet reported a larger negative free cash flow than analysts expected while maintaining its spending guidance for the year, putting it on course for its biggest-ever post-earnings drop.
“Alphabet reported a larger negative free cash flow than analysts had expected while maintaining its spending gudiance for the year.”
Arjun KharpalAlphabet / Google Company at center of the selloffJeffrey Wlodarczak Pivotal Research CEO, analystAngelo Zino CFRA analystAmazon Cloud/AI competitor also hit by the selloffIntel Chipmaker caught in the broader tech selloff
The whole story articlesvideospostscomments the bright band is this development · numbered dots are the others · click one to jump
What was reported 4 claims about this development
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first by Investing.com News, 10d ago · also Philadelphia Inquirer, WIVB News 4, Toronto Star, Yahoo Finance, WSJ Markets, WSJ
4 more headlines
- Asian shares and U.S. futures are mixed after Google parent Alphabet's earnings disappoint Philadelphia Inquirer · 10d ago
- Asia stocks mixed as Alphabet, Samsung results disappoint; more tech earnings loom Investing.com · 10d ago
- Alphabet tumbles, software and cybersecurity stocks sink as earnings disappoint: AlphaCheck Yahoo Finance · 10d ago
- AI Stocks Fall After Alphabet Earnings Disappoint WSJ Markets · 10d ago
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first by CNBC, 10d ago
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1 outlet Alphabet falls 10% in premarket, putting it on course for its biggest ever post-earnings drop
first by CNBC, 10d ago
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first by Bloomberg Tech, 11d ago
1 more headline
- Microsoft, Alphabet Earnings Put Focus on AI Cash Flow Drain Bloomberg Tech · 11d ago
On air 1 segment · click to watch, arrow keys to move
What people said 18 voices · verbatim
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TheRegister: Shares in Google’s parent company Alphabet dived by almost ten percent on Wednesday, after the web giant admitted AI-powered searches earn it less money than it earns by serving ads with its old-school search engine.
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Anthropic recently published the data/results for q1 and q2. People saw that and thought the situation wasn't that bad. So the rally happened on old data. It's smoke n mirrors, here look at our business while tokenmaxxing, ignore Chinese open models, ignore us lowering the token price by half, ignore the whole 3rd quarter, thanks. And people clap…
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I have not been saying this for past 3 years. I myself didn't start heavily using ChatGPT/Claude until early 2025 when it became much better at searching the internet for information. I imagine I'm still relatively early based on how most people here still talk about LLMs like they're still using the free version from 2024.
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The five billion is an expense but doesn’t result in negative cash flow. The cash flow impact is when the fine is paid to the government. This is why free cash flow is the best way to determine a companies health. For instance Microsoft free cash flow of 18.6 billion vs 8.54 billion shows much healthier company.
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It still gets argued about. The case for it was that a listed stake has a real market price, and parking the swings in OCI let companies choose when to show gains by choosing when to sell. The cost is quarters like this one, where EPS moves with a stock price the company doesn't control.
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Google said search query growth was the highest it's been in five years, and Search revenue still grew 12%. That doesn't settle what agents do to search long term, but it's hard to argue they're eating the query yet. The cost of serving those queries is a separate question.
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Agreed, it makes EPS noisy for anyone holding big listed stakes. The cleanest read is operating income, which sits above that line: Alphabet's went from $31.2B to $40.6B while the $8.7B equity-securities loss landed below it in other income.
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Fair, it did slow from Q2. The release doesn't break out AI Mode revenue, so the per-query gap you're describing can't be measured from the filing yet. That's probably the number to watch for once they start disclosing it.
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They literally stated in the quarterly financial statement that the $5 billion was paid to the government this quarter, hence why it was part of free cash flow. Read the docs before you make wild claims next time.
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The search growth decelerated though. And the fact that query increase faster than revenue from it might be telling the story that AI search is not profitable as traditional one (though that is only speculating)
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which is causing other areas to lag behind Like what? If they cut back on capex spending I would sell my shares. People don't understand that they aren't thinking of today but rather 10 years from now.
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They literally did LMAO. Moderna came out with frankly absurd results on preventing recurrence of a cancer that was like 40% better than baseline...and the shares tanked. The market is full of morons.
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The capex reduces revenue. They can choose to net more at any time. Busness is fine just growing at 25% instead of 35% is all. Buy the dip if you think the buisness has more room to grow.
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Yes I agree. The search and ad shit the bed. The question remain if it is a “AI about to kill search” story finally coming, or Google hasn’t really started to profit from AI yet
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I will sell GGLL tomorrow for profit, but will hold some GOOGL as long term. I left MSFT when it was $350 range, now it is 550 range. I do not want to miss GOOGL like taht.
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'investing' at 5 x cost. Look at the margins of Nvidia, tsmc and Others. Bonuses of SK Hynix employees etc... The whatever it costs mentallity is the Problem.
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imo it gets confusing after this change, for companies that have large stakes in other companies with volatile price swings.
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$5 billion of that was a fine they had to pay from a 2018 lawsuit that just finalized through appeals.
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