Alphabet Shares Plunge 12% in Record Single-Day Decline on AI Spending, Search Ad Slowdown Fears

Alphabet (GOOGL) shares fell more than 12% on Thursday, the stock's worst single day on record and steeper than any decline during the Covid-19 pandemic or the 2008 financial crisis. The drop erased roughly half a trillion dollars in market value, the second-largest single-day wipeout in history after Nvidia's nearly $600 billion slide in early 2025. The selloff followed quarterly sales that missed analysts' expectations, reigniting concerns that Google's search advertising business may not withstand consumers shifting to AI chat bots. Alphabet also disclosed a second consecutive quarter of negative free cash flow and $51.4 billion in capital expenditures for the third quarter, against $91.4 billion for all of 2025. By contrast, Microsoft reported $18.6 billion in third-quarter free cash flow and ended Thursday flat. Investors are increasingly scrutinizing which companies are spending rationally on data centers and AI, punishing those burning through cash.