Amid concerns over the competitiveness of Google’s artificial intelligence (AI) service “Bard,” the stock price of Alphabet, Google’s parent company, fell sharply for two consecutive days in the New York Stock Exchange, disappearing more than $161 billion in market capitalization.
According to Bloomberg News on the 9th (local time), Alphabet’s stock price, which was $107.64 based on the closing price on the 7th, plunged 7.68% on the 8th after AI-related unfavorable factors broke out, and closed at $95.01, down 4.39% on the same day.
11.7% fell for two days due to a much larger drop than 2.75% at the time of the earnings announcement on the 3rd. The market capitalization decreased by about USD 162.1 billion over the two days.
Bloomberg reported that Alphabet’s stock price fell by USD 170 billion in two days as of the 5.1% drop during the day, and the Wall Street Journal (WSJ) reported that Google’s two-day market capitalization decline was the largest ever.
Alphabet’s stock price plunge was led by concerns that Google’s rushing Bard’s search accuracy was poor, with Microsoft (MS) announcing to install a chatbot similar to ChatGPT on its search engine Bing after the global success of AI chatbot ChatGPT.
When asked about the James Webb Space Telescope on Bard, he gave the wrong answer, saying, “It was used to photograph a planet outside the solar system for the first time.”
According to market research firm Stat Counter, Google accounts for 93% of the global search engine market, and Bing accounts for only 3%.
However, as Microsoft is trying to reverse the game of the search market by using AI chatbot function, doubts about Google’s future competitiveness have been highlighted.
Bloomberg assessed that AI themes, which have been mainly small-cap stocks in the New York Stock Exchange, are also affecting big tech (big information technology companies such as Alphabet and Microsoft), and that investors value winning AI competition apart from basic conditions (fundamental).
However, Bill Stone, chief investment officer (CIO) of investment advisory firm Glenview Trust, said, “There are clear concerns that Alphabet will lose its edge in search, but Alphabet still has a means of competition.”
Investment bank Morgan Stanley raised caution that changing consumers’ search habits will be difficult and expensive, and some observers say Bing has a long way to go to catch up with Google’s search capabilities.