Posted 3/1/2024, 2:53:42 PM
Alphabet Shares Plunge $80 Billion as AI Shortcomings Stoke Investor Fears About Future Growth
- Alphabet's share price plunged due to concerns that it is falling behind in AI, wiping out $80B in market value and underscoring the importance of AI to investors
- Failing to keep up in AI poses an existential threat to Alphabet's core search advertising business, which generates over $100B in cash annually
- Alphabet trades at a discount to peers despite strong growth and profits, as investors worry it can't compete with AI leaders like Nvidia and Microsoft
- Alphabet has the resources to produce credible AI products but it's uncertain if they will drive growth, so its dominance in search may be disrupted
- Investors are attuned to Alphabet's AI risks, turning a blind eye to its cheap valuation compared to other big tech companies