Alphabet reported a larger negative free cash flow than analysts had expected while maintaining its spending gudiance for the year.

A potentially historic drop for Alphabet’s stock is dragging the U.S. market lower Thursday after the company behind Google and YouTube reported weaker growth for the summer than analysts expected. The report underscored worries about whether all its huge investments in artificial-intelligence technology will pay off.

Alphabet and Microsoft reported strong earnings fueled by growing AI demand, even as the tech giants continue investing billions in data centers and cloud infrastructure.

Wall Street hammered Alphabet for an earnings miss that included weaker-than-expected revenue out of the company's core business.

Rule Breakers recommended Alphabet on June 9, 2022, at a split-adjusted $113.75. Even after that drop, the stock has gained more than 150% from that price and remains comfortably ahead of the S&P 500. Across Motley Fool services, Team Rule Breakers and Team Hidden Gems have recommended it many times since.

Stocks declined as a revenue shortfall from the Google parent caused one of the largest one-session market capitalization drops for a single company on record, feeding doubts about the payoff from artificial-intelligence infrastructure spending.

Alphabet reported a larger negative free cash flow than analysts had expected while maintaining its spending gudiance for the year.

At first glance, Alphabet's third-quarter earnings looked impressive. Total revenue increased 25% year over year to $127.6 billion, while operating income rose 30% to $40.6 billion. However, analysts expected $128.2 billion in sales, meaning Alphabet fell short of Wall Street's forecast.