Alphabet loses about $500 billion in market value after Q3 earnings miss
Alphabet's shares fell nearly 13% on Thursday, erasing roughly $500 billion in market capitalization as revenue growth slowed and AI spending raised investor concerns.
Alphabet Inc.'s Class A shares closed at $283.82 on Thursday, down 12.6%, wiping about $499.8 billion from the company's market value, the second-largest single-day loss on record. The decline followed the company's third-quarter earnings report, which showed revenue of $127.6 billion, up 25% year over year but short of analysts' expectations.
Investors highlighted the slowdown in Google Search advertising growth, which rose 12% versus 17% in the prior quarter, and the scale of the company's AI-related capital spending. Alphabet invested roughly $51.4 billion in data centers and computing infrastructure during the quarter and projects total capital expenditures of $195-$205 billion for the year, with further increases anticipated through 2027.
Google Cloud revenue more than doubled to $30.7 billion, surpassing forecasts, but the CFO warned of near-term margin pressure as the business relies on external computing capacity to meet demand.
"Google Cloud could face near-term pressure on profit margins as we rely on outside computing capacity," CFO Anat Ashkenazi said.
The results illustrate the broader challenge for large technology firms that are allocating billions to AI infrastructure while investors seek clear evidence of sustainable profitability. The day's loss exceeded Alphabet's prior single-day record of $275 billion in July, and remains behind Nvidia's record $589 billion drop in January 2025.