Alphabet shares plunge $500 billion as AI disrupts search ad sales

Alphabet shares plunged over 13%, erasing more than $500 billion in its largest-ever market drop, after disappointing search and advertising sales intensified investor fears that AI is undermining its core business. The Google parent reported third-quarter sales, excluding partner payouts, of $111.2 billion, missing analyst projections. Ad revenue from search and other channels, which accounts for roughly half of total revenue and funds massive AI investments, also fell short of forecasts, growing at its slowest pace in five quarters. JPMorgan analysts, including Doug Anmuth, noted the results highlight the slim margin for error when a hyperscaler spending hundreds of billions on AI infrastructure posts weak core business performance.