AI Spending Spooks Investors as Alphabet Stock Sinks After Q3 Results

Alphabet shares tumbled and risked losing hundreds of billions of dollars in market value after massive spending on AI infrastructure rattled investors despite strong revenue growth.

Alphabet shares tumbled, threatening to erase up to $400 billion from the market capitalization of Google's parent company following the release of its third-quarter earnings report, Israeli newspaper Globes and CNBC reported.

According to reports by Globes and CNBC, despite the company posting a 25% surge in revenue and robust growth in its cloud computing division, investors reacted sharply to massive capital expenditures on artificial intelligence infrastructure, shrinking profit margins, and negative cash flow. CNBC and Yahoo Finance also noted that the quarterly results reflect initial signs that AI developments are cutting into Google's core search business.

The full broader impact of the selloff on other Wall Street technology stocks has not yet become clear.