by CHARLOTTE HAZARD | The National News Desk
MOUNTAIN VIEW, CALIFORNIA – AUGUST 13: The Google logo is displayed in front of company headquarters during the Made By Google event on August 13, 2024 in Mountain View, California. Google announced new Pixel phones, watches and AI features at the event. (Photo by Justin Sullivan/Getty Images)
WASHINGTON (TNND) — Alphabet, the parent company of Google, has its shares drop almost 13% this week, meaning $482 billion has been wiped off its market value.
This is the steepest one-day percentage decrease in Alphabet’s history since 2004, according to the Daily Mail.
According to the news outlet, investors weren’t thrilled by the company’s overall financial performance.
This is resulting in questions about whether investments into artificial intelligence will deliver returns shareholders are expecting.
The Daily Mail also reports that Alphabet’s free cash flow had a deficit of around $9 billion due to increased data center and AI infrastructure spending.
Susannah Streeter from Wealth Club told the Daily Mail that this shows how investors are looking at the AI boom.
“Investors are becoming far more discerning about the opportunities AI presents,” she said. “The days of rewarding companies simply for announcing massive AI investments have faded fast. “The focus has shifted rapidly, and investors are demanding clear evidence of returns on that spending. Alphabet’s dramatic share slide demonstrates this change in attitude.”
Streeter added that the market is getting increasingly nervous.
“The AI opportunity remains enormous, but the market is no longer prepared to give companies a blank check to pursue it,” she said.
