Alphabet loses $500bn in value as AI search summaries hit ad revenue

Alphabet, Google's parent company, lost over $500 billion in market value on Thursday, sending its stock to a six-month low after revealing that AI-generated search summaries are hurting advertising revenue. The company's quarterly revenue grew 25% to $127.6 billion, boosted by Google Cloud's 103% surge, but profits fell 25% and it posted negative free cash flow exceeding $9 billion due to heavy AI spending. Its market value dropped to $3.46 trillion from $3.97 trillion. Amazon and Microsoft also faced investor skepticism this week amid massive AI investments. Amazon shares fell 6% after reporting a six-fold increase in spending, while Microsoft's stock dipped less than 1% despite announcing job cuts and $5 billion less in AI spending.