Alphabet shares hit six-month low after quarterly profits drop

Google parent company Alphabet suffered a sharp decline in market value after revealing quarterly financial results that disappointed investors. BBC News reported that the company's stock fell to a six-month low. The loss in market value reached 500 billion dollars, according to reports from BBC News and The Guardian. [1][5][6]

Alphabet's total quarterly revenue grew 25 per cent compared to the previous year, reaching 127.6 billion dollars, BBC News reported. This growth was boosted by Google Cloud, where revenue rose 103 per cent to almost 31 billion dollars. However, profits at Alphabet dropped by 25 per cent during the quarter, and free cash flow turned negative by more than 9 billion dollars. [1]

According to BBC News, Google's artificial intelligence search summaries affected its core advertising revenue, contributing to investor concerns. The negative free cash flow figure was nearly double the cash loss reported by Alphabet three months prior. Investors have been scrutinising heavy spending on artificial intelligence to see if it yields sufficient financial returns, as FTMQ Tech reported earlier. [1][14]

The fall in Alphabet's shares impacted broader financial markets. CNBC reported that the tech-heavy Nasdaq Composite dropped 1.4 per cent, while the Dow Jones Industrial Average and the S&P 500 each fell 0.4 per cent. NDTV reported that Google's parent company fell 13 per cent during the market decline. [2][8]