Alphabet loses more than $500 billion in market value as AI search weighs on ads

“Alphabet” lost more than $500 billion in market value on Thursday after revealing that artificial intelligence search summaries were weighing on its core advertising business, Anadolu Agency reported.

Shares in “Google”’s parent fell nearly 13% to a six-month low, bringing its market valuation down to $3.46 trillion from $3.97 trillion.

Quarterly revenue rose 25% year on year to $127.6 billion, while net profit fell 25%. Free cash flow turned negative, with outflows exceeding $9 billion as AI investment surged.

Advertising generates the vast majority of “Google”’s revenue, and the company said its default AI summaries of users’ search queries had reduced ad sales.

“Amazon” shares also dropped 6% in after-hours trading. The retailer reported an 11% increase in sales to $201 billion, alongside negative free cash flow of $42 billion.