US stocks fell at the opening bell, dragged lower by a plunge in Alphabet Inc. after disappointing results revived investor concerns that its losing ground despite massive artificial intelligence spending.
The tech-heavy Nasdaq 100 Index was down 1.4% as of 9:44 a.m. in New York, while the S&P 500 fell 0.4%.
Alphabet shares fell 10%, setting the stock up for its biggest-ever market value wipeout, after the company reported disappointing search and advertising sales that reinforced worries about AI’s threat to its core business.
“After missing forecasts on essentially every key metric except cloud revenue tonight, Google is playing the AI Hunger Games from a position of weakness,” Michael O’Rourke, chief market strategist at JonesTrading Institutional Services LLC, wrote in a note. “Disappointing results in advertising, a business it and Meta Platforms dominate globally, illustrate the key risk investors fear.”
The latest earnings have renewed doubts over the AI trade, raising questions about whether significant spending on the technology can generate returns quickly enough to justify lofty valuations. Investors will get even more earnings to parse when Amazon.com Inc. reports after the market closes on Thursday.