What Alphabet's Steep Drop Means for Investors and the AI Trade

Alphabet shares dropped sharply on Thursday, Oct. 29, after weaker-than-expected advertising results and heavy AI spending revived worries about whether big technology companies can turn the AI boom into profit, according to Eurasia Business News. The Google parent traded about 13% lower, a move that would erase roughly $500 billion in market value if it held.

The selloff dragged the Nasdaq Composite down. Those numbers were intraday readings rather than confirmed closing results, the outlet noted.

What happened to Alphabet and the major indexes

Eurasia Business News reported that Google's advertising business fell short of analysts' expectations, while free cash flow declined as the company built out AI infrastructure. Shares had already slid about 10% in after-hours trading following the earnings release.

If the intraday loss were sustained, it would be larger than Alphabet's 11.6% one-day drop in 2020, the outlet said. Reuters reported that U.S. stocks opened lower as the company's figures renewed concern about rising AI costs.

The reports on the Nasdaq differ slightly. Eurasia Business News put its decline at about 1.6% in one passage and about 1.4% in another. It said the Dow Jones Industrial Average and the S&P 500 each fell roughly 0.3%.

Why AI use is not yet translating into revenue

According to the earnings account cited by the outlet, growing use of AI Mode searches contributed to weaker search revenue than analysts expected, because those interactions earn less than traditional searches. In other words, more people using the AI product did not bring in proportionately more money.

That leaves Alphabet balancing two demands: spending enough to stay competitive in AI while protecting the advertising business that pays for it. Eurasia Business News said the reaction suggests investors wanted clearer proof that monetization can keep up with adoption.

The drop followed a stretch of renewed optimism around Anthropic's proposed IPO and strong demand for computing infrastructure, the outlet reported. Alphabet's results shifted attention back to cash generation. The outlet's reading is that AI demand has not vanished, but investors are less willing to overlook large spending without convincing returns.

What this means for investors and savers

For people who hold technology stocks directly or through funds, the day showed how much a single large company's results can move the Nasdaq. Alphabet's decline was the main driver of the tech-heavy index's weakness, while the Dow and S&P 500 fell by smaller amounts.

The broader message, according to Eurasia Business News, is that markets are demanding evidence that growth can hold up against expensive capital and persistent inflation. Spending on AI is being judged by the profits it produces, not only by the technology it delivers.

Economic data released the same day complicated the picture. The advance estimate showed U.S. GDP growing at a 3.4% annualized rate in the third quarter, up from 2.2% in the second. The outlet stressed that this is an annualized quarterly rate, not growth of 3.4% over three months.

The quarterly core PCE inflation measure rose at a 2.5% annualized pace. That was above the expected 2.4% but below the 3.3% of the previous quarter. Eurasia Business News said strong growth combined with lingering inflation reinforced expectations that monetary policy could stay restrictive.

Oil, gold and silver on the day

Brent crude settled 44 cents lower at $114.88 a barrel, and West Texas Intermediate fell 78 cents to $102.00, according to the outlet. It said diplomatic developments eased some supply fears, citing a Wall Street Journal report that Vice President JD Vance had written to Iranian official Mohsen Rezaei to try to restart peace talks.

Spot gold was at $4,015.60 per troy ounce, down more than 1%, and silver was at $52.06, down more than 3%. Those were timestamped spot readings, not final settlements. Metals Focus attributed silver's heavier decline to weaker investment demand and improving physical availability.

Around Prague, based on reporting by Eurasia Business News