Alphabet Shares Drop After Search Revenue Misses Expectations

Alphabet reported financial results that fell short of Wall Street expectations for the last quarter. The search division, which is the company's primary revenue source, grew 12% compared to the previous year but missed projections for the second consecutive quarter.

The market reacted with pessimism and sent shares down more than 10% in after-hours trading. Analysts suggest that the rise of artificial intelligence bots and agents may be changing how users conduct searches and interact with digital commerce.

The company also reported negative free cash flow of 9 billion dollars for the period. This marks the second straight quarter of negative figures and surpasses the previous mark of 5.9 billion dollars.

Alphabet executives justified the slowdown by citing the impact of currency exchange rates on revenue. The company emphasizes that it continues to invest heavily in artificial intelligence infrastructure and the Gemini model to remain competitive against rivals like OpenAI and Anthropic.

This technological transition raises uncertainties regarding the sustainability of the traditional advertising model. The gap between high query volumes and generated revenue creates a challenging scenario for the tech giant.