The latest wave of hyperscaler earnings is spooking Wall Street. Bulls and bears alike have evidence to validate their wildest dreams — or their worst nightmares.

Why it matters: The market's AI obsession has entered its Jekyll and Hyde era, with the latest earnings from tech giants offering contrary signals about the AI boom.

Driving the news: The tech-heavy Nasdaq briefly sank into correction territory, falling 10% from its prior peak, losing $1.2 trillion in value for the month of October, after a slew of earnings reports pointed to AI's big risks.

But it wasn't all horror: within the earnings statements, some investors found proof that the AI bet is going exactly as it should.

Here are three examples of the AI trade's deepest contradictions — the good and the scary — from the earnings releases and calls of the Big Tech hyperscalers.

Google:

The scary: AI overviews are cannibalizing Google's core business: ad revenue from search. Yes, search queries are up, but results in AI mode have lower margins.…