Alphabet shares just plunged 12.6 percent in the worst day on record
Alphabet just suffered its worst trading day ever since going public in 2004.
The short version
- Shares dropped 12.6 percent to $283.82 and wiped out $482 billion in value.
- Bank of America now values Google search lower than fossil fuel stocks.
- Growth missed expectations as massive AI spending hit cash flow.
Why it matters to you. For business owners relying on search traffic and digital ads, the massive pivot toward artificial intelligence is rapidly reshaping how customers find your store online.
Alphabet, which owns Google and YouTube, just suffered its worst trading day as a public company since it began trading in 2004. Shares plunged 12.6 percent on Thursday to $283.82, wiping out about $482 billion in market value in a single session.
According to Fortune, the selloff came after search revenue growth slowed to 12 percent, missing analyst expectations of 15 percent as the tech giant pours billions into artificial intelligence. Bank of America, the major banking and financial services institution, now values the core Google search business at about 10 times earnings, putting it below the broader S&P 500 index and even cheaper than energy stocks.
Alphabet spent $51.4 billion on capital expenditures in the quarter, more than double the amount from a year earlier, leaving free cash flow at negative $9.1 billion. Google chief executive Sundar Pichai told investors on an earnings call that query growth is at its highest rate in five years, even as traffic shifts toward AI-written summaries that reduce traditional website clicks.
Bank of America analyst Justin Post cut his price target on the stock to $380 from $430 while maintaining a Buy rating on the company. Meanwhile, Google co-founders Larry Page and Sergey Brin lost an estimated $60 billion combined on paper during the drop, according to Forbes, the business magazine.
Chief financial officer Anat Ashkenazi confirmed that capital spending is expected to reach $200 billion in 2026 and rise to $300 billion in 2027. Google plans to offset the shift by scaling new advertising formats directly inside its artificial intelligence summaries globally.
Photo: Austin McKinley, CC BY 3.0, via Wikimedia Commons
