Alphabet shares plunged nearly 13% on Thursday following the release of the company’s third-quarter financial results. The decline marked its steepest trading session since its public listing in 2004, exceeding previous major sell-offs, including losses of more than 10% in March 2020 and September 2008.
According to Yahoo Finance calculations, the sell-off wiped approximately $482 billion from Alphabet’s market capitalisation. That marked the second-largest single-day loss in market value ever recorded by a US-listed company.
Only Nvidia recorded a larger decline, losing approximately $593 billion in market value on January 27, 2025, amid investor concerns surrounding China’s DeepSeek artificial intelligence model.
Alphabet’s latest loss also surpassed the approximately $400 billion decline previously recorded by SpaceX (SPCX) on June 22, which had ranked as the second-largest single-day market-value drop.
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In absolute dollar terms, Thursday’s decline was Alphabet’s largest ever. Its previous record loss stood at approximately $275 billion on July 23, 2026.
Bespoke Investment Group data also showed that the latest sell-off represented Alphabet’s most significant post-earnings stock decline since its public listing. The previous record was a nearly 10% drop in July 2008.
Strong Google Cloud Growth Fails to Reassure Investors
Alphabet’s third-quarter results presented a mixed picture, with strong growth in cloud computing and artificial intelligence offset by weaker-than-expected search revenue.
Google Cloud revenue more than doubled to approximately $31 billion, while Google’s Gemini application surpassed one billion users, highlighting the company’s expanding position in the AI market.
However, the core search business failed to meet Wall Street expectations. Search revenue increased 12% to approximately $63 billion, below analysts’ estimates of $65 billion.
The weaker-than-expected performance raised concerns about the outlook for Google’s traditional search business as artificial intelligence changes how users access information online.
Heavy AI Spending Raises Cash-Flow Concerns
Alphabet’s growing investment in artificial intelligence infrastructure also weighed on investor sentiment.
Free cash flow, which measures the cash remaining after capital expenditures and other investments, moved into a deficit of approximately $9 billion as the company increased spending on data centres and AI infrastructure.
Investments and financial commitments involving AI research companies added to the pressure.
Pivotal Research CEO Jeffrey Wlodarczak suggested that investors may increasingly view artificial intelligence as a competitive threat to Google’s traditional search business.
He said bearish investors could interpret the latest quarterly results as evidence that AI is beginning to have a material impact on the company’s search operations.
However, CFRA analyst Angelo Zino offered a more constructive assessment, telling Yahoo Finance that the share-price decline could potentially present a buying opportunity.
Alphabet’s Market Value Faces Wider Pressure
The decline comes amid a broader increase in major market-value losses across US-listed companies.
According to Yahoo Finance calculations based on Bloomberg data, US-listed stocks recorded single-day market capitalisation losses of at least $200 billion on 18 occasions during 2026 through Wednesday. The figure compares with 13 such occurrences throughout 2025 and none before 2022.
Alphabet has also lost approximately $1.4 trillion in market value since reaching its record valuation in May.
The developments reflect growing investor scrutiny of major technology companies, particularly their AI strategies, infrastructure costs, profitability and ability to generate sustainable returns.
Amazon Also Faces AI Spending Concerns
Concerns about elevated AI investment extended beyond Alphabet.
Amazon, the last of the three major cloud service providers to announce results during the week, reported faster cloud growth alongside record cash outflows after Thursday’s market close.
Amazon Web Services (AWS) recorded revenue growth of 39%, its fastest expansion in nearly five years. However, the company’s trailing 12-month free cash flow deteriorated to a record outflow of more than $42 billion.
Amazon shares also declined in after-hours trading, indicating that investor concerns about AI infrastructure spending and cash-flow pressures are affecting other major technology companies.
The latest market reaction suggests investors are increasingly looking beyond AI capabilities and revenue growth. They are also examining whether massive investments in artificial intelligence can translate into sustainable profits and long-term shareholder value.
