$500 bn wiped out: What triggered Google Alphabet’s worst day ever
Alphabet faced its largest single-day stock market drop, losing nearly $500 billion due to rising AI expenses and slower business growth. Google Cloud surged 103%, but investor concerns over AI spending remain high.
Alphabet, Google's parent company, suffered its biggest-ever single-day stock market fall on Thursday, losing nearly $500 billion in market value. The sharp fall came as investors grew worried about the huge amount of money Big Tech companies are spending on artificial intelligence (AI) and whether these investments will bring enough returns. Alphabet shares fell 12.6% during the session, marking their worst single-day performance in the company's history.
According to The Wall Street Journal, the Class A shares closed at $283.82, wiping out around $499.8 billion in market value. This was the second-biggest single-day loss in US stock market history. The biggest was Nvidia's $589 billion market value loss in late January 2025. The fall came as investors reacted to Alphabet's third-quarter results, which showed that some of its key businesses were growing more slowly than expected, while spending on AI infrastructure continued to rise.
Before this, the company's worst daily loss was around $275 billion on July 23, 2026. Its shares had fallen 7% on that day, following the release of its second-quarter results, Forbes reported. The latest decline also affected the wider US stock market. Nasdaq Composite fell 1.38%, while the S&P 500 slipped around 0.3%. Alphabet's co-founders Larry Page and Sergey Brin also saw a sharp fall in their personal wealth.
According to Forbes, Page lost around $31 billion, taking his net worth to $236 billion. Brin lost nearly $29 billion, bringing his net worth down to $217.2 billion. Alphabet misses revenue estimates as Google search faces pressure The sell-off followed Alphabet's third-quarter earnings report, released late Wednesday. The company reported revenue of $127.6 billion, below market expectations. Revenue excluding payments to distribution partners also missed estimates, coming in at $111.2 billion, Forbes reported.
Advertising revenue from Google Search and other channels, which accounts for around half of Alphabet's total revenue, also fell short of expectations. Bloomberg reported that advertising growth was at its slowest pace in five quarters. Google's search advertising revenue grew 12% to $63.35 billion. However, the growth was lower than analysts had expected, CNBC reported. Philipp Schindler, Alphabet's chief business officer, said part of the shortfall was linked to lower monetisation in the company's AI Mode.
He added that Alphabet was now expanding advertisements within AI Overviews and AI Mode. The results added to concerns that AI could affect Google's traditional search business. Investors are closely watching whether the company can maintain its advertising revenue as more users turn to AI-powered tools to find information. Google Cloud reported strong growth, with revenue rising 103% from a year earlier to $30.7 billion.
This was higher than analysts' estimate of $29.2 billion, Forbes reported. Alphabet executives also said the Gemini AI app had crossed 1 billion users. However, investors were more concerned about how much the company was spending to expand its AI business. Alphabet recorded negative free cash flow of $9.07 billion in the third quarter. This was a sharp difference from analysts' expectations of positive free cash flow of $2.7 billion.
Free cash flow is the money a company has left after paying for its operating expenses and investments in its business. A negative figure means the company spent more cash than it generated during the period. Alphabet also kept its full-year capital expenditure forecast unchanged at $195 billion to $205 billion. The company had disclosed more than $1 trillion in multiyear spending commitments for infrastructure, energy and leases.
It had also raised nearly $80 billion in capital in June. Amazon shares fall 4.25% as investors worry about AI costs Amazon also saw its shares come under pressure on Thursday after its third-quarter profit and revenue fell short of market expectations. The company's shares closed 4.25% lower at $243 on the Nasdaq, compared with the previous closing price of $254.60. The decline continued after the regular trading session, with the stock falling further by around 7% in after-hours trading.
The fall came despite strong growth in Amazon Web Services (AWS), the company's cloud computing business. Investors were concerned about the company's earnings and the amount of money it plans to spend on artificial intelligence. Amazon, however, maintained its plan to spend around $220 billion on capital expenditure this year, with a large part of the investment going towards AI. 475 trillion estimate explained Intel shares plunge 23% in after-hours trading Chipmaker Intel also witnessed a sharp fall in its shares on Thursday.
The stock closed 3.62% lower during regular trading before plunging around 23% in after-hours trading. The fall came as investors reacted to the company's plans to put more money into its operations and expansion. Intel is also facing challenges linked to an uncertain personal computer market and manufacturing difficulties. These concerns, along with its higher spending requirements, have added to investor worries about the company's outlook.
