Alphabet Stock Drop: Why Google Lost Nearly $500 Billion

Alphabet stock has plunged on October 29, 2026, wiping out approximately $500 billion off the market value of Google’s parent company. Its shares fell approximately 12.6%, marking the company’s steepest single-day decline. The sell-off followed its third-quarter earnings report, which showed weaker-than-expected profits and slower growth in its advertising business.

A major concern among investors is Google’s increasing spending on artificial intelligence (AI). Alphabet has reportedly spent $51.4 billion on capital expenditure during the third quarter, mainly on data centres and AI infrastructure. Meanwhile, its search advertising revenue grew by 12% to $63.4 billion, below market expectations. Investors are increasingly questioning whether Google’s AI investments will generate enough revenue to justify the rising costs, especially as AI-powered search changes how people find information online. Source: The Guardian.

Despite this steep decline, Alphabet’s business still recorded strong growth in some areas, particularly Google Cloud, whose revenue increased by 103% to $30.7 billion. However, the disappointing earnings and concerns about future profitability triggered a major sell-off, also affecting other technology stocks. The nearly $500 billion loss represents a reduction in the company’s stock market value, not money directly withdrawn from its bank accounts.