Google is set for a $400 billion stock wipeout after disappointing earnings

Google CEO Sundar Pichai. Karl Mondon / AFP via Getty Images

Alphabet's share price is tumbling on Thursday after it reported that Google's AI search mode isn't making as much as expected in its latest earnings.

As of around 7:20 a.m. ET, Alphabet's stock was set to open at $287.92, down 10.5% from Wednesday's close. That drop would equate to a loss of more than $400 billion from the company's market capitalization, which stood at $3.95 trillion on Wednesday.

In Wednesday's earnings call, CEO Sundar Pichai said AI helped search queries grow at the fastest year-over-year pace in five years.

However, the financials are lagging behind.

Google's parent company, Alphabet, reported third-quarter search revenue of $63 billion, below analysts' estimates, and up just 1% from the previous quarter.

It came as a shock because search revenue beat estimates in each of its four previous quarterly earnings reports.

"It's worth noting that…