Google Stock Plunges 12% on AI Fears, but Joseph Carlson Isn't Selling, Says Shares Look Cheap
Key takeaways
- Google’s stock plunged 12.6% amid AI‑related search concerns, but the company’s valuation and cloud upside keep it attractive for those willing to wait.
- 12.6% share drop
- $285 per share
- 18.6× 2027 earnings
What happened
Alphabet Inc. (GOOGL) shares fell 12.6% on Thursday, wiping almost $500 billion from market value and $23,400 from investor Joseph Carlson’s holdings. The drop followed a slowdown in search revenue growth and concerns that AI is eroding Google’s most profitable business. Carlson, who runs the stock‑analysis site Qualtrim, said he will not sell and believes the market is overreacting to the earnings report.
Why it matters
The selloff shows how quickly market sentiment can swing on a single earnings release, especially when AI is a headline theme. It also highlights the tension between Google’s high valuation multiples (18.6× 2027 earnings, 15.5× 2028 earnings) and the perceived risk of a slower search engine. The move could influence…
Short-term and longer-term
Short-term. Over the next few days, watch for any short‑term rebound as traders digest the valuation upside.
Longer-term. For the coming months, Google’s shift toward cloud and AI‑powered search could gradually change its revenue composition.
Words on this card
- Capital expenditure (capex)
- Money spent on buying or upgrading physical assets like equipment or buildings.
- Free cash flow
- Cash a company generates after covering operating expenses and capital investments.
- Operating margin
- Profitability measure showing what percentage of revenue remains after operating costs.
- AI Mode
- Google’s AI‑powered search interface that currently earns less ad revenue per query than traditional search.
- Foreign exchange impact
- Currency fluctuations that affect revenue reported in a company’s local currency.
- Revenue
- Sales — money the company took in before costs.