Alphabet shares hit six month low after profits drop 25 percent

Alphabet, the parent company of Google, saw its stock fall to a six-month low after revealing that artificial intelligence search summaries were affecting its advertising revenue. The BBC and The Guardian both reported that the company lost $500 billion in market value following the announcement, which dragged down wider stock markets. [1][8][9]

The company's quarterly revenue rose 25 percent compared to last year, reaching $127.6 billion, according to the BBC. Growth was driven by Google Cloud, where revenue climbed 103 percent to almost $31 billion. However, profits fell by 25 percent during the same quarter. [1]

Alphabet also recorded negative free cash flow exceeding $9 billion for only the second time in its history as a public company, the BBC reported. This cash loss is nearly double the amount shown by the company three months earlier. Cash flow represents the money a company keeps after paying for operations. [1]

Google handles billions of queries daily and captures roughly 90 percent of global searches, relying on data-driven advertising auctions for most of its revenue. Wall Street serves as a metonym for American financial markets and the financial services industry. [13][15][16]