Alphabet stock drops over 13%, investors favor cash-disciplined AI giants
Alphabet (Google's parent company) just took a big hit: its stock dropped more than 13%, wiping out roughly $500 billion in value.
The reason? Investors are starting to prefer tech giants that keep a close eye on their cash while investing in AI.
Microsoft, for example, has $18.6 billion in free cash flow, and Oracle's stock jumped after it planned to put a ceiling on external financing.
Meanwhile, Alphabet spent 121.4% of its operating cash flow on new projects, more than it actually brought in.
Alphabet faces slowing search growth
This heavy spending comes as Alphabet's main business, search, isn't growing like it used to.
Unlike Microsoft and Oracle, who are balancing their AI push with solid financial discipline, Alphabet is taking bigger risks by leaning hard into spending.
The market is clearly rewarding companies that invest smartly and rely more on their own resources instead of borrowing or seeking extra investor money.