ALPHABET LOSES MORE THAN $500BN IN MARKET VALUE

Alphabet, Google’s parent company, lost just over $500bn in market value on Thursday after its quarterly results unsettled investors. Estimates of the loss in sterling range from £374bn to more than £400bn. Alphabet’s market value closed at $3.46 trillion, down from $3.97 trillion the previous day. Its shares reached a six-month low. The company said AI summaries in Google Search had reduced the number of adverts it could sell during the quarter.

Alphabet reported a 25% rise in quarterly revenue from a year earlier, to $127.6bn. It said Google Cloud revenue rose 103% to almost $31bn. Quarterly profit fell 25%, according to the company’s results. Alphabet reported negative free cash flow of more than $9bn, its second such result since becoming a public company. That cash shortfall was almost twice the amount it reported three months earlier.

Google now displays AI summaries by default for search queries. Alphabet has directed much of its increased spending towards AI investments. Microsoft and Amazon also updated investors this week and outlined plans to continue spending heavily on AI. Investors expressed concern about how that spending could affect growth in the companies’ established businesses. Alphabet’s results also showed that changes to its search service were affecting advertising, a core source of revenue.