Nasdaq falls as Alphabet faces record loss amid AI spending worries
The Nasdaq fell 1.20% as Alphabet shares dropped 11.7% after disappointing search advertising results and increased AI spending, putting the company on track to lose more than $464 billion in market value. The Dow fell 0.35% and the S&P 500 lost 0.32%.
1. Alphabet weighs on Nasdaq
Alphabet shares fell 11.7% and were set for their steepest one-day decline on record after the company reported disappointing search advertising results and a surge in cash burn as AI-related spending accelerated. If losses held, Alphabet was on track to shed more than $464 billion in market value, accounting for most of the Nasdaq-100's projected decline of more than $500 billion.
2. Technology shares weaken
Software stocks fell after Fortinet and ServiceNow each dropped more than 20% following quarterly results. The Philadelphia Semiconductor index was down 0.9%, while Microsoft fell 1.5% after reports it planned to raise at least $25 billion through a bond sale. Marvell Technology slid 11.6% after reports of advanced talks to buy Lumentum Holdings; Lumentum rose 3.5%.
3. Broader market mixed
At 11:49 a.m. ET, the Dow was down 0.35%, the S&P 500 0.32% and the Nasdaq Composite 1.20%. Eight of the 11 S&P 500 sectors were higher, led by healthcare and financials. Data showed U.S. inflation accelerated in September and the economy grew at its fastest pace in a year in the third quarter.
