Google Loses Nearly $500 Billion in One Day
Google Loses Nearly $500 Billion in One Day
Alphabet shares fell 12.6% after its quarterly report as investors worried about massive AI spending and slowing ad revenue.
Google Loses Nearly $500 Billion in One Day
After the quarterly report was published, Alphabet shares fell 12.6%. Despite 25% revenue growth, investors were alarmed by huge AI spending and the slowdown in Google's advertising business.
In the third quarter, the company spent $51.4 billion on capital expenditures, mainly on servers and data centers. Free cash flow turned negative (−$9.1 billion). For all of 2026, $195–205 billion of investments are planned, and spending is expected to grow even more in 2027.
At the same time, Google Cloud revenue doubled to $30.7 billion. However, search revenue growth slowed to 12%, and Google acknowledged that queries in AI Mode are currently monetized worse than traditional search.
Meanwhile, in Finland authorities suspended preparatory work at two Google sites for new data centers due to an unfinished environmental assessment.
Why it matters
AnalysisThe sharp rise in AI capex shows that even the largest tech companies face margin pressure while AI monetization remains uncertain.
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