Google makes most of its money from ads and over the last decade Google along with Facebook have basically had a duopoly on digital ad spend.
As other competitors enter this space (Tiktok, Amazon, Microsoft and maybe Apple) more ad dollars will move away from Google and Facebook and into their competitors.
For Google to retain its large share of digital ad spend they need to ensure their services remain popular and give advertisers reason to spend with them and not with competitors.
Imo Google is being attack on all fronts right now. On one side of this you have lots of competitors entering the digital ad space and for the first time they're beginning to challenge the Google/Facebook digital ad duopoly. At the same time Google's core product (search) is now also being challenged by Microsoft.
It's not difficult to now envision a world in which over the next decade Google's share of search drops and their share of digital ad spend drops. And meanwhile they'll probably need to spend more on innovation and new products (with unproven profitably) to defend themselves from increased competition.
There's nothing investors like less than uncertainty and Google's future is much less certain today than it was a few years ago. They'll continue to be a great company, but as an investor you now have to reassess growth and profitability risks and ask whether the risk/reward of Google's stock today has changed. In addition to this Google's stock has performed okay over the last year when compared to their digital ad competitors (Facebook & Snapchat) and even relative to the stocks of other large tech companies (Amazon, Adobe, Salesforce).
I think what we're seeing is the market begin to question and reassess assumptions made about Google which has always been seen as a very safe investment. The recent drop is possibly an over reaction when viewed from the perspective of a single catalyst, but maybe part of the issue is that a lot of assumptions have been wrong for some time and only now are they being questioned in light of recent events.
My guess is that you'll see volatility for some time yet until investors start to become confident that risks have been adequately repriced.