logo
Why Alphabet Stock Slipped Today

Why Alphabet Stock Slipped Today

Globe and Mail23-06-2025
On Monday, an Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) rival took a turn in the spotlight, draining attention and sentiment from the tech giant. The Google parent's two publicly traded stocks ended the day around 1% lower in price, comparing unfavorably to the nearly 1% gain of the S&P 500 (SNPINDEX: ^GSPC).
Here comes competition
That rival is Alphabet's peer in the self-driving taxi space, Tesla. On Sunday, the high-profile auto company officially launched its Robotaxi service in Austin, Texas. Although rides were limited to selected users, the event went off smoothly, without any reported accidents.
While Alphabet's great strength and the source of its wealth is the advertising it sells for its omnipresent search engine, the company has been pushing into other cutting-edge tech ventures for much of its corporate life. One of the more prominent of these is its own autonomous taxi service, Waymo, which has been operational in a handful of U.S. cities for months, even years.
With the launch of the Tesla service, Alphabet now has a competitor in the self-driving taxi space. Investors rarely like when one of their companies suddenly loses a big competitive advantage.
King of the road for now
Yet the reactive hit to Alphabet's stock was minimal, most likely because many investors realize that the self-driving taxi segment isn't (yet) large enough to seriously impact either their company or Tesla.
On top of that, Tesla hasn't revealed when, where, or to what degree it'll expand its Austin Robotaxi rollout. This suggests that the company is being cautious -- as it should be -- about widening the service.
So far, the auto-taxi space has been developing more smoothly than many expected; if it maintains the pace, such services will be commonplace before long. While Alphabet's Waymo now has competition (and more will surely come), it's not getting knocked off its perch as No. 1 in the near future.
Should you invest $1,000 in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!*
Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 23, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Companies focused on AI see surge this earnings season
Companies focused on AI see surge this earnings season

Globe and Mail

time3 hours ago

  • Globe and Mail

Companies focused on AI see surge this earnings season

Businesses focused on artificial intelligence are raking it in so far this earnings season. Those catering to actual people, less so. The AI spending surge is providing a big boost for semiconductor and software giants like Google parent Alphabet Inc. GOOGL-Q, while companies from airlines to restaurants and food manufacturers are struggling to navigate an erratic U.S. trade policy which is boosting costs, upending supply chains and hurting consumer confidence. Along with Alphabet, SK Hynix and India's Infosys exceeded market forecasts on Thursday and predicted brighter days to come, with Alphabet and SK Hynix both flagging plans to boost spending. SK supplies the world's most valuable company Nvidia Corp. NVDA-Q, the AI chipmaking giant that recently surpassed US$4-trillion in market value. By contrast, executives at many consumer names were less enthusiastic, from luxury bellwether LVMH, packaged food giant Nestle, to toymakers Hasbro and Mattel and airlines Southwest and American. They, along with automakers and giants like Coca-Cola, have indicated that some segments of the buying public have pulled in their spending as prices and interest rates remain high. The dichotomy is evident in IBM's results. Sales in Big Blue's 'AI book of business' grew 25 per cent in its most recent quarter to US$7.5-billion, while its software segment fell short of expectations and the company sounded cautious about how much its consulting segment might grow this year. The equity market has accentuated the positive. News that the U.S. had struck a trade deal with Japan and was closing in on a deal with the European Union ahead of an Aug 1. deadline boosted markets. The broad S&P 500 notched another record this week and the Eurostoxx was just a few points shy of that mark. Airlines are using AI to set ticket prices. Here's how you can avoid price manipulation when booking flights 'The market is getting friendly with a view that tariffs ending up higher than they have ever been for 100 years will not have a negative impact on economic growth, because we haven't seen any negative impact on economic growth so far,' said Van Luu, head of solutions strategy, fixed income and foreign exchange at Russell Investments. Whether companies continue to absorb that hit remains to be seen. So far, companies have reported over July 16-22 a combined full-year loss of as much as US$7.8-billion, with automotive, aerospace and pharmaceutical sectors hurt the most by tariffs, according to a Reuters tariff tracker. U.S. averages have been buoyed by the so-called Magnificent Seven, a group of tech giants that has benefited heavily from spending plans on artificial intelligence, and currently accounts for more than 30 per cent of the value of the S&P. 'AI is one of the strongest areas of growth for the economy, and the market mirrors the economy,' said Adam Sarhan, chief executive of 50 Park Investments. To be sure, the market's reaction may be in part because a larger-than-normal percentage of companies are clearing a lowered bar for estimates. Walmart unveils AI super agents roll-out to boost e-commerce growth At the beginning of April, the market expected 10.2 per cent year-over-year S&P earnings growth, but by July, that number had dropped to 5.8 per cent, according to LSEG data. With about 30 per cent of constituents reporting results, the blended earnings growth rate sits at 7.7 per cent. AI-focused businesses continued to print money in the most recent quarter. Nvidia supplier SK Hynix posted record quarterly profit, boosted by demand for artificial intelligence chips and customers stockpiling ahead of potential U.S. tariffs. Indian IT services provider Infosys raised the floor of its annual revenue forecast range to 1 per cent to 3 per cent, from flat to 3 per cent, matching analyst expectations. 'The tech community is going ahead full speed ahead ... and banks are in a very strong position now,' said Bill George, former chairman and CEO of Medtronic and executive education fellow at Harvard Business School. 'Other companies will struggle to get growth.' Consumer companies have been less upbeat. Nestle, the world's biggest packaged food maker, reported softer demand as it struggled to win thrifty shoppers to its big brands. U.S. airlines Southwest and American Airlines warned that Americans are travelling less, the latest signal that U.S. consumers are remaining cautious about their spending. Toymakers Mattel and Hasbro both said uncertainties around tariffs are acting as a headwind. Carmakers are among firms dealing with the most difficulty. The auto giants are resisting raising prices, eating the cost of tariffs that may cost them millions or billions of dollars. Levies on metals, copper and auto parts made it harder to navigate changing tariff policies. South Korea's Hyundai Motor on Thursday posted a 16-per-cent decline in second-quarter operating profit, saying U.S. tariffs cost it 828-billion won (US$606.5-million) in the second quarter, with a bigger hit expected in the current quarter. General Motors still expects a US$4-billion to US$5-billion hit to its bottom line this year. On Wednesday, Tesla chief executive Elon Musk said U.S. government cuts in support for electric-vehicle makers could lead to a 'few rough quarters,' as his firm reported its worst quarterly sales decline in over a decade.

U.S. stocks have meandering day Thursday, Dow drops more than 300 points
U.S. stocks have meandering day Thursday, Dow drops more than 300 points

Canada News.Net

time5 hours ago

  • Canada News.Net

U.S. stocks have meandering day Thursday, Dow drops more than 300 points

NEW YORK, New York - U.S. stocks were on the defensive Thursday. The Dow Jones index corrected its recent hefty gains, finishing with a more than 300 points loss, while the Nasdaq Composite and Standard and Poor's 500 edged up, after hitting earlier intraday all-time highs. Better-than-expected results from Alphabet boosted market sentiment. "Given the size and influence of big tech and [artificial intelligence], I think the Alphabet results were a nice little tailwind for a market that's constantly asking the question of whether all the AI spend is going to have have solid return on investment]or whether this can continue," Ross Mayfield, investment strategist at Baird, told CNBC Thursday. "At least at the beginning of earnings season here, Alphabet provided a nice data point that the answer is positive," he said. 🔹 U.S. Markets S&P 500 (^GSPC): 6,363.35 ▲ +4.44 (+0.07 percent) Dow Jones (^DJI): 44,693.91 ▼ -316.38 (-0.70 percent) Nasdaq (^IXIC): 21,057.96 ▲ +37.94 (+0.18 percent) NYSE Composite (^NYA): 20,853.42 ▼ -68.42 (-0.33 percent) NYSE American (^XAX): 6,072.89 ▼ -4.96 (-0.08 percent) Russell 2000 (^RUT): 2,252.13 ▼ -31.00 (-1.36 percent) U.S. Dollar Edges Higher as Markets Await Key Economic Data The U.S. dollar showed modest strength against major currencies in Thursday's trading session, while the British pound held steady in cautious trading ahead of key economic data releases. Key Currency Movements EUR/USD: The euro inched up 0.04 percent to 1.1751, struggling to find momentum amid mixed Eurozone economic signals. USD/JPY: The dollar gained 0.04 percent against the yen, trading at 147.05 as Bank of Japan policy uncertainty weighed on the Japanese currency. USD/CAD: The greenback rose 0.09 percent to 1.3645 versus the Canadian dollar as oil price fluctuations influenced the commodity-linked loonie. GBP/USD: Sterling held flat at 1.3504, showing no change as traders awaited UK retail sales data. USD/CHF: The dollar edged up 0.02 percent to 0.7952 against the Swiss franc in quiet safe-haven trading. AUD/USD: The Australian dollar gained 0.05 percent to 0.6592, supported by improved risk sentiment in Asian markets. NZD/USD: The New Zealand dollar also rose 0.05 percent to 0.6030, mirroring its Aussie counterpart's movements. Market Drivers Forex markets remained in a holding pattern Thursday as traders awaited Friday's crucial U.S. PCE inflation data - the Federal Reserve's preferred price gauge. The dollar's modest gains reflected: Analyst Outlook "Currency markets are clearly in wait-and-see mode," said Maria Chen, senior FX strategist at Global Markets Capital. "The dollar's slight firming suggests markets are pricing in a potentially hawkish Fed, but we need to see tomorrow's inflation numbers for clearer direction." Up Next: All eyes turn to Friday's U.S. core PCE price index and Eurozone inflation figures for fresh trading catalysts. Global Markets Close Mixed on Thursday; Nikkei Surges Again Global equities showed a split performance on Thursday. Asian markets were strong, led by Japan's Nikkei 225, while European and some emerging markets saw modest declines. 🔹Canadian Markets 🔹 UK and European Markets FTSE 100 (^FTSE): 9,138.37 ▲ +76.88 (+0.85 percent) DAX (^GDAXI): 24,295.93 ▲ +55.11 (+0.23 percent) CAC 40 (^FCHI): 7,818.28 ▼ -32.15 (-0.41 percent) Euro Stoxx 50 (^STOXX50E): 5,355.20 ▲ +10.95 (+0.20 percent) BEL 20 (^BFX): 4,617.32 ▲ +21.10 (+0.46 percent) 🔹 Asia and Pacific Markets Nikkei 225 (^N225): 41,826.34 ▲ +655.02 (+1.59 percent) (Japan) Hang Seng (^HSI): 25,667.18 ▲ +129.11 (+0.51 percent) (Hong Kong) Shanghai Comp. ( 3,605.73 ▲ +23.43 (+0.65 percent) (China) KOSPI (^KS11): 3,190.45 ▲ +6.68 (+0.21 percent) (South Korea) TWSE (^TWII): 23,373.73 ▲ +55.06 (+0.24 percent) (Taiwan) S&P/ASX 200 (^AXJO): 8,709.40 ▼ -27.80 (-0.32 percent) (Australia) All Ordinaries (^AORD): 8,979.40 ▼ -22.00 (-0.24 percent) (Australia) STI Index (^STI): 4,273.05 ▲ +41.77 (+0.99 percent) (Singapore) S&P/NZX 50 (^NZ50): 12,814.17 ▲ +9.04 (+0.07 percent) (New Zealand) Sensex (^BSESN): 82,184.17 ▼ -542.47 (-0.66 percent) (India) IDX Composite (^JKSE): 7,530.90 ▲ +61.67 (+0.83 percent) (Indonesia) KLSE (^KLSE): 1,540.32 ▲ +10.53 (+0.69 percent) (Malaysia) 🔹 Latin American Markets Sensex (^BSESN): 82,184.17 ▼ -542.47 (-0.66 percent) (India) Bovespa (^BVSP): 133,807.59 ▼ -1,560.67 (-1.15 percent) (Brazil) IPC Mexico (^MXX): 57,035.90 ▲ +557.00 (+0.99 percent) (Mexico) S&P IPSA (^IPSA): 8,141.82 ▲ +1.12 (+0.01 percent) (Chile) MERVAL (^MERV): 2,135,086.50 ▲ +51,409.38 (+2.47 percent) (Argentina) 🔹 Middle East Markets TA-125 (^ 3,115.02 ▼ -37.44 (-1.19 percent) (Israel) EGX 30 (^CASE30): 34,125.10 ▲ +321.80 (+0.95 percent) (Egypt) 🔹 African Markets 🔸 Market Summary

Alphabet and AI stocks nudge Wall Street to more records
Alphabet and AI stocks nudge Wall Street to more records

Globe and Mail

time7 hours ago

  • Globe and Mail

Alphabet and AI stocks nudge Wall Street to more records

NEW YORK (AP) — Wall Street inched to more records on Thursday as gains for Alphabet and artificial-intelligence stocks helped make up for Tesla 's steep tumble. The S&P 500 added 0.1% to its all-time high set the day before. The Dow Jones Industrial Average fell 316 points, or 0.7%, while the Nasdaq composite rose 0.2% to its own record. Alphabet climbed 1% after the company behind Google and YouTube delivered a fatter profit for the latest quarter than analysts expected. It's leaning more into artificial-intelligence technology and said it's increasing its budget to spend on AI chips and other investments this year by $10 billion to $85 billion. That helped push up other stocks in the AI industry, including a 1.7% rise for Nvidia. The chip company was the strongest single force lifting the S&P 500 because it's the largest on Wall Street in terms of value. But an 8.2% drop for Tesla kept the market in check. Elon Musk's electric-vehicle company reported results for the spring that were roughly in line with or above analysts' expectations, and Musk is trying to highlight Tesla's moves into AI and robotaxis. The focus, though, remains on how Musk's foray into politics is turning off potential customers, and he said several rough quarters may be ahead as 'we're in this weird transition period where we'll lose a lot of incentives in the U.S.' Stocks have broadly been rallying for weeks on hopes that President Donald Trump will reach trade deals with other countries that will lower his stiff proposed tariffs, along with the risk that they could cause a recession and drive up inflation. The record-setting gains have been so strong that criticism is rising about how expensive stock prices have become. That in turn puts pressure on companies to deliver solid growth in profits in order to justify their gains. Chipotle Mexican Grill also helped weigh on the market despite delivering a profit for the spring that topped analysts' expectations. The restaurant chain's growth in revenue came up short of expectations, and its stock fell 13.3%. IBM dropped 7.6% even though it likewise reported a stronger profit than expected. Analysts pointed to slowing growth in its software business, among other things underneath the surface. American Airlines lost 9.6% despite reporting a stronger profit than expected. The company said it expects to report a loss for the summer quarter. It also gave a forecast for full-year results that had a wide range: between a loss of 20 cents per share and a profit of 80 cents per share, depending on how the economy performs. Reactions in the stock market have generally been stronger than usual when companies beat or miss their profit targets by a wide margin, according to Julian Emanuel at Evercore. Other extreme moves have also been roaring underneath the market's surface, including huge swings for 'meme stocks.' Those are stocks where traders are looking to jump in amid online cheerleading and ride it higher, before a halt in momentum leaves some investors holding the bag. Opendoor Technologies rose 5.7% following a manic stretch where it swung by at least 10%, up or down, in 10 straight days. Such swings, though, haven't been showing up in overall market indexes, which have been gliding recently. The S&P 500 hasn't had a day where it moved by at least 1% in a month. All told, the S&P 500 rose 4.44 points to 6,363.35. The Dow Jones Industrial Average fell 316.38 to 44,693.91, and the Nasdaq composite rose 37.94 to 21,057.96. In the bond market, Treasury yields held relatively steady following the latest signals that the U.S. economy seems to be holding up OK despite pressures from tariffs and elsewhere. One report said that fewer U.S. workers applied for unemployment benefits last week, a potential signal of easing layoffs. A separate report from S&P Global suggested growth in U.S. business activity accelerated in July, and the preliminary results easily topped economists' expectations. That helped solidify expectations on Wall Street that the Federal Reserve will hold interest rates steady at its next meeting next week, even though Trump has been agitating angrily for cuts. The European Central Bank, which had earlier been cutting its rates, also held steady on Thursday as it waits to see how Trump's tariffs affect the economy. The yield on the 10-year U.S. Treasury note briefly approached 4.44% in the morning before pulling back to 4.40%, where it was late Wednesday. In stock markets abroad, indexes rose across much of Asia and Europe. Tokyo's jump of 1.6% and London's rise of 0.8% were two of the bigger gains.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store