Alphabet lost approximately $500 billion in market value Thursday after its Class A shares plunged 12.64% to close at $283.82, according to The Wall Street Journal. The decline marked the second-largest single-day market value loss in stock market history, behind Nvidia's $589 billion loss in January 2025, and surpassed Alphabet's own previous record of approximately $275 billion in July.
The sell-off followed Alphabet's third-quarter earnings report, which showed revenue of $127.6 billion, up 25% from a year earlier but below Wall Street's expectations. Google Search revenue grew 12% year-on-year, down from 17% growth in the previous quarter, raising concerns about the company's ability to sustain growth as AI-powered search tools reshape the industry.
Investors focused on the mounting costs of Alphabet's artificial intelligence expansion. The company spent approximately $51.4 billion on capital expenditures during the quarter, much of it directed toward data centers and computing infrastructure. According to previous Fox Business reporting, Alphabet expects capital expenditures to reach between $195 billion and $205 billion this year, with spending projected to increase significantly in 2027.
One bright spot emerged in Alphabet's performance: Google Cloud revenue more than doubled to $30.7 billion, an increase of 103% from a year earlier, exceeding analysts' expectations of $29.2 billion. The growth reflects strong demand for AI services. However, Alphabet Chief Financial Officer Anat Ashkenazi warned, according to previous Fox Business reporting, that Google Cloud could face near-term pressure on profit margins as the company relies on outside computing capacity to meet demand.
The results highlight a widening challenge for major technology companies as they invest billions into AI infrastructure while facing investor pressure to demonstrate that those investments will generate sustainable profits. Thursday's market reaction underscores concerns about whether AI spending will translate into meaningful returns for shareholders.