Google had its worst day in years after earnings came in weaker than expected, while Microsoft's results looked solid by comparison.

• Google's stock dropped sharply after its core search ad business, which makes up most of its revenue, grew slower than Wall Street wanted.
• The worry is that Google's new AI chat features don't show ads, so as more people use AI search instead of regular search, Google could be cannibalizing its own biggest money-maker.
• Google is spending more on AI investment and is now burning cash instead of generating it, even though the company still has plenty of cash and a massive backlog of future business.
• Microsoft had the opposite story: its biggest division, cloud and AI infrastructure, grew the fastest, which is why its stock rose instead of falling.
• Both companies are still committing huge amounts of money to AI data centers and chips, suggesting the broader AI spending boom is not slowing down, even though one company (Google) is struggling.

Outlook: This looks like a Google-specific problem rather than a sign the AI boom is cooling, so other AI-linked stocks may hold up better than Google in the near term.