Alphabet Selloff Drags Nasdaq Lower as AI Spending Worries Return
Google's parent company came under heavy selling pressure Thursday after its revenue missed expectations, renewing questions about the cost of the AI buildout.
Alphabet's earnings disappointed investors Thursday, sending the Google parent's shares sharply lower and weighing on the Nasdaq as concerns returned over the cost of building artificial-intelligence services.
The selloff followed quarterly results released Wednesday. Revenue came in below analysts' expectations, while increased AI-related spending put the company's cash generation under closer scrutiny.
In Reuters' 2:40 p.m. Eastern market report, Alphabet shares were down 13.2% and the Nasdaq Composite was down 1.66%. Those figures reflect afternoon trading, not final closing prices.
The pressure spread beyond Alphabet. Semiconductor and software shares also weakened, with Fortinet and ServiceNow recording steep declines after their own quarterly results.
The broader market was mixed beneath the major indexes. Healthcare shares were among the stronger performers, while smaller companies held up better than the biggest technology stocks.
The trading session came a day after the Federal Reserve held interest rates steady. Investors were also weighing new economic data and another round of company earnings, keeping both inflation and the returns on AI investment in focus.