For all the attention on Alphabet’s (NASDAQ: GOOGL) cloud business and its massive AI spending, Search is still the engine that built the company. Without a doubt, it’s what the company is best known for. That’s why its third-quarter Search results have raised concerns alongside headlines about the company’s rising capital expenditures (CapEx). Growth in Alphabet’s core business slowed noticeably, and investors are now asking a pointed question: is the AI revolution Alphabet is betting so heavily on starting to eat into the business that funds it?
The market’s reaction so far has been harsh. Shares fell roughly 12% the day after earnings and have continued to slide, closing at $278.99 on Monday, Nov. 2. The decline leaves the stock down approximately 11% this year and about 32% below its 52-week high.
