The evaporation of 500 billion dollars from the value of Google and the future repeating the past as a farce. The use of artificial intelligence search (and AI agents) is killing Google's current advertising model and will soon reach similar businesses of Facebook (extreme) and in general, all IT companies that push advertising (in any form) to the "contextual window of human attention" is the basis of their business model. For context, just in case: Reuters: Google's parent Alphabet reported disappointing results in its core search advertising business and a sharp increase in cash burn as the company pours resources into artificial intelligence. In a sign that enterprise customers are actively adopting the technology, Google Cloud's revenue more than doubled, but investors worried about the huge cost and slowing growth of the market-dominant search engine sent shares down 10% in after-hours trading. "In a market worried that AI could displace core businesses [like Crimson: i.e. serving ads on Google search], investors should see an acceleration, not a slowdown, in search engine growth," said Dave Wagner, portfolio manager at Aptus Capital Advisors.
"Cloud technology plays a key role, but until the search results show that AI is positive, the stock is expected to trade lower. Moreover, Alphabet still plans to significantly increase its capital expenditures in 2027 from the $195 billion expected this year to $205 billion, Chief Financial Officer Anat Ashkenazi told analysts on a conference call. While executives did not give a specific spending amount for 2027, investors were wary of a sharp jump.
Ashkenazi added that she expects a short-term decrease in profits.