Alphabet Sheds Over $500 Billion in Market Value After First Earnings Miss Since 2022 Raises AI Search Fears

Alphabet shares plunged as much as 13.5% on Thursday, wiping more than $500 billion from the Google parent's market value after third-quarter results missed Wall Street expectations. It marked the company's first bottom-line earnings miss since late 2022 and, if the stock closed down more than 9.77%, would represent the worst post-earnings reaction in Alphabet's 22-year history and the second-largest single-day loss of any stock on record.

The selloff centered on two converging concerns: softening core search advertising trends and an escalating artificial intelligence spending bill. Alphabet's AI Mode, which serves users direct answers rather than a ranked list of links, is reducing ad clicks and undermining the search advertising model that has long been the company's financial engine. Analysts warned of a near-term profit squeeze as heavy capital expenditure continues to build, even as Google Cloud revenue surged and beat expectations.

The broader market felt the impact. The Nasdaq 100 fell roughly 1.47%, the S&P 500 dropped 0.43%, and the Dow slid 0.45%. Memory chip stocks were also caught in the downdraft, with Micron falling about 3.5%, SanDisk dropping approximately 2.71%, and SK Hynix slipping around 1%. Communication services stocks were among the hardest-hit sectors as Alphabet's results dragged the group sharply lower.