Alphabet Shares Plunge, Wiping Out $500 Billion in Market Value

Shares of Google parent company Alphabet witnessed a sharp decline on Thursday, erasing approximately $500 billion in market value in a single trading session. The loss amounts to more than ₹47 lakh crore. Despite making massive investments in Artificial Intelligence (AI), concerns over profitability and the potential impact of AI-powered search on advertising revenue have unsettled investors. As a result, Alphabet's stock fell to its lowest level in six months, with its market capitalisation dropping from $3.97 trillion to $3.46 trillion. The growing popularity of AI chatbots such as ChatGPT and Claude has also raised concerns about Google's dominance in the search engine market.

The company's latest financial performance and rising expenditure have added to investor concerns. Alphabet reported revenue of $127.6 billion for the third quarter, but the figures reportedly fell short of Wall Street analysts' expectations. Google has also indicated that spending on AI infrastructure, including data centres and specialised chips, is likely to increase further. These investments are putting pressure on free cash flow, while the company has yet to provide clear signs of immediate profitability from its AI spending. The combination of rising costs, uncertain returns and concerns over declining search advertising revenue has prompted investors to sell their shares.