$6.6 million GOOG put options trade placed, 4,903 contracts at $275 strike expiring January 2027.
Updated todayNew2 sources
Alphabet Shares Drop 13% After Exec Admits AI Mode Cuts Search Ad Revenue
The gist
Alphabet's core advertising business, which depends on users clicking traditional search results, faces a structural challenge if AI-generated answers replace those clicks without matching their revenue yield. The question of whether Google can monetize AI search at the same rates as traditional search remains unresolved.
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The full picture
Alphabet shares fell 13%, erasing over $500 billion in market value, after business chief Philipp Schindler told investors that AI Mode is lowering the monetization of search. Google reported advertising revenue of $82.01 billion, missing the Wall Street estimate of $83.57 billion, and search revenue growth slowed from 17% to 12%. Schindler's acknowledgment that AI-generated search results monetize at lower rates than traditional search ads drove the selloff. A trader purchased 4,903 GOOG put contracts at the $275 strike expiring January 2027, spending $6.6 million, which MilkRoadAI described as directional conviction rather than a hedge. By contrast, Meta reported advertising revenue growth of 26% last quarter, with ad impressions up 10% and average price per ad up 14%.
How it developed
Sources
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