Major Setback for Google’s Parent Company

Shares of Alphabet, the parent company of Google, came under heavy pressure in the US stock market on Wednesday, falling by as much as 11% within the first few hours of trading. The company’s quarterly results failed to meet Wall Street expectations, while rising expenditure on artificial intelligence services and cloud infrastructure weighed on investor sentiment. Reports indicated that the decline wiped out around $280 billion in Alphabet’s market value, equivalent to approximately ₹26 lakh crore.

During the third quarter, Google Cloud revenue reached $30.7 billion, helping offset weaker-than-expected growth in Google Search and YouTube. However, despite an increase in overall revenue, Alphabet’s net profit and earnings per share reportedly fell short of market expectations. The company’s substantial investments in AI and cloud infrastructure have also raised concerns about cash flow and the time required to generate returns. Uncertainty over whether these investments will deliver sufficient profits in the near term added to the selling pressure on its shares.