Investors punish Alphabet over softer ad revenue, and Amazon slides after hours
A record drop for Google's parent drags the Nasdaq lower, a day after the Fed left rates untouched.
Alphabet, Google's parent company, suffered the biggest share price fall in its history on Thursday. The stock lost as much as 14 percent during the session, Trends reports, and around 500 billion dollars of market value was wiped out, De Tijd and HLN write. According to Het Nieuwsblad the shares fell to their lowest level in six months. The trigger was Wednesday evening's quarterly figures: revenue of 127.6 billion dollars and earnings fell short of expectations, and net profit dropped by a quarter, Business AM reports.
Investors are mainly worried about search advertising, which still makes up almost two thirds of revenue, La Libre writes. It came in 1.4 billion dollars below expectations, and chief business officer Philipp Schindler himself pointed to the AI mode in the search engine, according to Business AM. De Tijd writes that investors fear AI agents are eating into Google's business model. At the same time, Google Cloud revenue more than doubled, but heavy investment in AI infrastructure pushed free cash flow 9.1 billion dollars into the red.
The slide dragged the tech-heavy Nasdaq deep into the red, De Tijd reports. Microsoft's cloud business grew 30 percent, but its shares also closed lower, and software company ServiceNow lost more than a quarter after disappointing guidance. Amazon followed after the closing bell: revenue rose 12 percent to 201.9 billion dollars and its AWS cloud unit grew faster than expected, Trends reports. Even so, the stock fell 7 percent after hours because the fourth-quarter outlook failed to convince and chief executive Andy Jassy announced substantially higher investment for 2027, De Tijd writes.
Economic data kept the market somewhat afloat. The US economy grew at an annualised 3.4 percent in the third quarter, stronger than expected, La Libre reports. The US central bank left its rate unchanged at 3.75 to 4 percent on Wednesday evening and wants to wait for next week's midterms, according to Business AM; traders see a high chance of a rate rise in December. The Fed's preferred inflation gauge, the PCE index, climbed to 3.6 percent in September, Trends reports.