Alphabet Stock Has Its Worst Day Ever, Losing Nearly $500B

What happened

Alphabet stock had the worst day in its history on Thursday, Oct. 29. Shares of Google’s parent company fell nearly 13%, the steepest single-session drop since it went public in 2004, according to Yahoo Finance. Close to $500 billion in market value disappeared in one day.

The selloff followed the company’s third-quarter report, released after the bell on Wednesday. Revenue came in a little under Wall Street’s forecast, search grew more slowly than expected, and the company spent so heavily on artificial intelligence infrastructure that it ended the quarter with negative free cash flow of $9.1 billion, Reuters reported.

The drop dragged on the wider market. The Nasdaq Composite closed down 1.38% and the S&P 500 slipped 0.3%, while the small-company Russell 2000 rose about 1%, Yahoo Finance’s market coverage showed.

Why the Alphabet stock drop was so big

On paper, the quarter does not look like a disaster. Revenue rose 25% from a year earlier to $127.6 billion, the 13th straight quarter of double-digit growth, according to a summary of the earnings call. Operating income climbed 30% to $40.6 billion.

Investors zeroed in on three other things.

Search missed. Search revenue grew 12% to $63.3 billion. Analysts had expected roughly $65 billion, so the gap was about $1.7 billion. Sky News reported that search growth fell short of forecasts by almost three percentage points. Total advertising revenue was $82 billion against the $83.4 billion analysts expected, according to Reuters. Chief Business Officer Philipp Schindler pointed in part to AI Mode, Google’s chatbot-style search, which so far earns less per search than the classic results page.

Cash went out faster than it came in. The business produced $42.3 billion in operating cash, but capital spending, mostly on data centers and AI chips, reached $51.4 billion. Subtract one from the other and you get the minus $9.1 billion in free cash flow. Analysts had expected roughly breakeven, Reuters reported. It was the second negative quarter in a row. “Google has now reported two quarters of negative cash flow, and this is unacceptable for investors,” Kathleen Brooks of the broker XTB told Sky News.

More spending is coming. Alphabet kept its 2026 capital spending forecast at $195 billion to $205 billion and said spending will rise significantly in 2027, without giving a number. Chief Financial Officer Anat Ashkenazi warned that building up inventory of Google’s own AI chips, called TPUs, would put further pressure on cash flow.

Profit also took a hit from outside the core business. Alphabet booked an $8.2 billion loss in “other income,” mainly an unrealized loss on its stake in SpaceX, and net income for shareholders fell 25% to $26.17 billion.

The bright spots

The quarter had real wins, which is why some analysts were less alarmed.

• Google Cloud revenue rose 103% to $30.7 billion, and its operating income more than tripled to $11.1 billion. Cloud now makes up about 24% of Alphabet’s revenue.
• Backlog, meaning cloud contracts signed but not yet billed, reached $561 billion. Alphabet expects to recognize just over 55% of it within 24 months.
• Gemini, Google’s AI assistant app, passed 1 billion users. CEO Sundar Pichai called it the fastest-growing product in Google’s history.
• YouTube ad revenue rose 9% to $11.2 billion.

The worry is about how those pieces fit together. “The bears will argue this is the first quarter that AI is starting to seriously hurt their search business,” Pivotal Research CEO Jeffrey Wlodarczak told Yahoo Finance. In other words, AI may be helping the cloud unit while eating into the search ads that still pay most of the bills.

How it compares

Based on figures reported by Yahoo Finance and Sky News, here is where Thursday ranks among the largest one-day losses in market value for a U.S.-listed company:

Nvidia’s record came on the day China’s DeepSeek rattled AI investors. Thursday’s loss is the same story from a different angle: doubts about whether huge AI budgets pay off. Losses that size are becoming routine: by Yahoo Finance’s count, a single U.S.-listed company shed at least $200 billion in one day 18 times this year before Thursday, versus 13 times in all of 2025. Alphabet itself is down about $1.4 trillion from its record in May.

If you follow the AI money trail, our explainers on SpaceX’s third-quarter results and Anthropic’s IPO filing cover two of the other big names in the same race.

What happens next

The next test came right after Thursday’s close, when Amazon reported. Amazon kept its 2026 capital spending forecast at $220 billion, and its free cash flow over the 12 months to Sept. 30 was an outflow of $42.4 billion, compared with an inflow of $14.8 billion a year earlier, Yahoo Finance reported. Its shares fell as much as 10% after hours before paring losses. Microsoft, by contrast, beat forecasts and held up better after its own report.

For Alphabet, analysts say the key is search. Dave Wagner of Aptus Capital Advisors told Reuters the stock will likely stay under pressure until search growth speeds up and shows that AI adds to the business. Google plans to bring ads in AI Mode to more countries, which is one way it hopes to close that gap.

Quick answers

Why did Google stock drop today?

Alphabet fell nearly 13% on Oct. 29 after third-quarter search revenue missed forecasts and AI spending pushed free cash flow to negative $9.1 billion, the second negative quarter in a row.

How much money did Alphabet lose in one day?

Close to $500 billion in market value. That’s the second-largest one-day loss for a U.S.-listed company, behind Nvidia’s roughly $593 billion drop on Jan. 27, 2025.

Is Google still growing?

Yes. Revenue rose 25% to $127.6 billion, Google Cloud more than doubled, and search still grew 12%. Investors are worried about the pace of search growth and the cost of AI, not about falling sales.