Alphabet stock falls sharply, with $500 billion in market value wiped out in a single day
Alphabet shares tumble in $500bn rout
Alphabet's stock fell 13% on Thursday, wiping out a record $500 billion in market value, the second-largest single-day market value decline in Wall Street history, behind only Nvidia's $593 billion in January 2025. Cash flow fell to negative $9.1 billion last quarter, AI-related spending exceeded $50 billion, capital expenditure rose to $51.3 billion, and is projected to reach as high as $205 billion for the full year. Core search advertising revenue was $63.4 billion, up 12% year over year, but below expectations; Google's chief business officer acknowledged that AI mode queries, which provide conversational answers, are diverting traffic from traditional search and bringing lower ad monetization. Cloud revenue doubled to $30.7 billion, partly offsetting search weakness; net profit fell 25% to $26.2 billion. Compared with Microsoft, whose free cash flow was $18.6 billion and whose stock price was roughly flat, Alphabet's cash discipline has been questioned.
Alphabet lost 500 billion USD in market value in a single day, in contrast with Microsoft's cash discipline, reflecting a repricing by the market of the trade-off between AI capital expenditure and free cash flow.