Alphabet (GOOGL Quick QuoteGOOGL - Free Report) shares extended their recent decline and have now entered bear market territory as the search engine giant reported Q1 earnings results that missed expectations. First-quarter EPS of $24.62 missed the Zacks Consensus Estimate by -4.2% and translated to a decline of -6.3% relative to last year. The EPS miss marked the first since Q1 of 2020 – the beginning of the pandemic. The rise of rival TikTok likely contributed to the less-than-stellar results.

Revenues of $68.01 billion increased 23% year-over-year. Quarterly revenues at Google and YouTube were affected by the war in Ukraine as well as slower ad spending. YouTube revenue grew 14.39% to $6.9 billion, marking the slowest growth in the past five quarters.

Shares were off about -3.5% early in today’s session. A host of brokerage price target reductions accelerated the selling. Alphabet’s earnings shortfall may signal trouble on the horizon for the online-advertising industry.

Alphabet CFO has warned about potentially slower growth in the second quarter. GOOGL faces particularly difficult relative comparisons versus growth in 2021. Costs and operating expenses were up 23.2% from last year to $47.9 billion, and Alphabet is likely to see a continued escalation in expenses as it targets new technologies and markets. The company also faces significant headwinds such as global litigation and unfavorable foreign exchange impacts.

GOOGL is a Zacks Rank #3 (Hold) with a market cap of over $1.5 trillion. While Alphabet is still a top technology leader, the stock looks to have topped in the short-term. Investors may want to look elsewhere for new portfolio additions.