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If you Google \u201cWhat was Google\u2019s worst day ever?\u201d the answer is now October 29. Shares of parent company Alphabet plunged, erasing roughly $500 billion in market value, according to The Wall Street Journal<\/a>. The drop pulled the whole Nasdaq down with it and made investors more worried that companies are spending more on AI than they\u2019re getting back.<\/p>\n The cause of the bloodbath? Wednesday\u2019s earnings report. Google Services, the unit that includes search ads, YouTube and subscriptions, brought in $96.3 billion. Wall Street expected $98.5 billion. Search revenue grew 12% year over year in the third quarter, a slowdown<\/a> from 17% in the second quarter and 19% in the first.<\/p>\n Google also reported higher-than-expected operating expenses and negative free cash flow as it pours money into data centers<\/a> and new AI models. Investors have tolerated Big Tech\u2019s AI spending spree largely because core businesses kept churning out profits. That cushion now looks thinner.<\/p>\n Mike O\u2019Rourke, chief market strategist at JonesTrading, tells the Journal that Google \u201cshowed vulnerability to AI.\u201d The stock also formed what\u2019s known as a \u201cdeath cross.\u201d That\u2019s when a stock\u2019s short-term average price drops below its long-term average, which some analysts see as a sign it could fall even further.<\/p>\n<\/p><\/div>\n If you Google \u201cWhat was Google\u2019s worst day ever?\u201d the answer is now October 29. Shares of parent company Alphabet plunged, erasing roughly $500 billion in market value, according to The Wall Street Journal<\/a>. The drop pulled the whole Nasdaq down with it and made investors more worried that companies are spending more on AI than they\u2019re getting back.<\/p>\n The cause of the bloodbath? Wednesday\u2019s earnings report. Google Services, the unit that includes search ads, YouTube and subscriptions, brought in $96.3 billion. Wall Street expected $98.5 billion. Search revenue grew 12% year over year in the third quarter, a slowdown<\/a> from 17% in the second quarter and 19% in the first.<\/p>\n Google also reported higher-than-expected operating expenses and negative free cash flow as it pours money into data centers<\/a> and new AI models. Investors have tolerated Big Tech\u2019s AI spending spree largely because core businesses kept churning out profits. That cushion now looks thinner.<\/p>\n Mike O\u2019Rourke, chief market strategist at JonesTrading, tells the Journal that Google \u201cshowed vulnerability to AI.\u201d The stock also formed what\u2019s known as a \u201cdeath cross.\u201d That\u2019s when a stock\u2019s short-term average price drops below its long-term average, which some analysts see as a sign it could fall even further.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n