Alphabet shares record their worst day ever, shedding $500 billion in value
Alphabet’s search business missed expectations as AI spending pushed free cash flow to negative $9.07 billion, unsettling investors.
- On Thursday, Alphabet Inc. shares plunged 12.6%, erasing nearly $500 billion in market value after the tech giant reported third-quarter revenue of $127.6 billion that missed analyst expectations.
- Mounting investor anxiety regarding the sustainability of Artificial Intelligence infrastructure investments drove the sell-off, as Alphabet's capital spending topped $51 billion, pushing free cash flow to negative $9.1 billion for the quarter.
- Alphabet's 50-day moving average dipped below its 200-day average, forming a "death cross" technical signal, while quarterly revenue of $127.6 billion failed to meet investor projections of $128.22 billion.
- The sharp decline dragged major U.S. indexes lower, with the S&P 500 falling 0.3% and the Nasdaq composite tumbling 1.4%, as investors reassessed the potential returns on massive Artificial Intelligence infrastructure spending.
- Bank of America analysts warned that "tougher comps" will pressure Alphabet through the second quarter of next year, though some market observers suggest the historic sell-off may represent an overreaction.
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Google earns less on demand through artificial intelligence, and the rate of growth of search advertising is slowing down, with company capital spending exceeding $51 billion a quarter.
As a result, the Nasdaq index (which brings together technological values) drops by 2.26%.
Shares of Alphabet, Google's parent company, fell nearly 13% after reporting third-quarter earnings. It was the biggest one-day drop since the company went public in 2004. According to Yahoo Finance, Alphabet lost about $482 billion in market value, marking the second-biggest one-day loss for a U.S. company after Nvidia, which lost $593 billion in January 2025. Although the results showed strong growth in Google Cloud, Google's search revenue fe…
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