Alphabet's stock took a significant hit after the company announced plans for a substantial increase in AI-related spending, despite a slowdown in revenue growth. Google CEO Sundar Pichai stated that the company would invest $75 billion in capital expenditures by 2025, raising concerns among investors.
Google parent Alphabet ’s stock plunged by more than 8% — wiping out more than $200 billlion in market value — after the search giant unveiled plans for a massive uptick in AI-related spending despite a slowdown in revenue. Alphabet shares in midday trades were recently off 7.6% at $190.70. If the stock selloff holds, it would erase all of Alphabet ’s stock gains since the start of the year.
Pichai said that DeepSeek had done “very, very good work” but asserted that Google’s AI products were “some of the most efficient models out there.” He also defended Google’s spending plans.Walmart axing hundreds of jobs, closing office as more white-collar workers asked to relocate“The cost of actually using is going to keep coming down, which will make more use cases feasible,” Pichai added. “And that’s the opportunity space.
Overall, the Google parent reported quarterly revenue rose 12% to $96.5 billion – its lowest growth rate since 2023.“While the Cloud segment delivered revenue growth of 30%+ for a second consecutive quarter, results were slightly below investor expectations,” Wedbush analyst Dan Ives said in a note to clients. “That said, management commentary was positive and indicated that demand outpaced available capacity in the quarter.
Google is one of several Big Tech giants that have teed up major investments in AI infrastructure as they race against China – and each other – to develop advanced models.
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