Alphabet has worst day ever as cash burn spooks investors

Alphabet ↘ 1.45% shares had their worst day ever on Thursday, October 29, 2026. Investors dumped the stock after third-quarter results missed on several measures, and the slide erased about $500 billion of market value and pulled the Nasdaq Composite lower, The Wall Street Journal News Corp ↘ 1.37% reported. The shares were down 12% to 13% during the session, according to Sky News Comcast Corporation ↗ 4.27% and The Irish Times. The Associated Press noted that without Alphabet's drop, the S&P 500 ↘ 1.77% would have been higher for the day.news.sky.com+3

The loss is the second-largest one-day drop in market value for any U.S.-listed company. Only Nvidia's ↘ 4.22% roughly $593 billion loss on Jan. 27, 2025, the day DeepSeek rattled AI investors, was bigger, according to Yahoo Finance. Alphabet's previous record dollar loss was about $275 billion on July 23 of this year.sg.finance.yahoo.com

Search slows as cash burn deepens

Search revenue grew 12% from a year earlier, short of the 14.7% analysts expected. That happened even though CEO Sundar Pichai said queries were growing at their fastest pace in five years, Reuters Thomson Reuters Corporation ↗ 1.63% reported. Alphabet also said "AI mode" searches were threatening profits in its core ad business, The Irish Times reported. Revenue came in at $127.58 billion, below the $128.22 billion expected, and adjusted earnings per share were $2.67, against forecasts of $3.02, according to Business Insider.businessinsider.com+2

Free cash flow was negative $9.07 billion, more than three times the shortfall analysts had expected. Purchases of property and equipment topped $51 billion, AP reported. Alphabet kept its 2026 capital spending forecast at $195 billion to $205 billion and said spending would rise "significantly" in 2027, Business Insider reported.ktbs.com+1

Cloud strength fails to reassure

Google Cloud revenue more than doubled to $30.71 billion, but the spending outweighed that growth, Reuters reported. Investors instead rewarded Microsoft ↘ 1.55%, which produced $18.6 billion in free cash flow, and Oracle ↘ 6.37%, which said it would cap outside financing. "Alphabet and Microsoft were night and day," said Melissa Otto of S&P Global Visible Alpha.933thedrive.com

Wall Street divided

Citizens downgraded the stock, citing "significant execution risk." Bank of America ↘ 2.21% cut its price target to $380 but kept a buy rating, Business Insider reported. Economist David Rosenberg said the company "is burning cash at a rapid clip," adding that "negative free cash flow is forgiven only alongside a clean beat."businessinsider.com

Kathleen Brooks of XTB said, "Google has now reported two quarters of negative cash flow, and this is unacceptable for investors," Sky News reported.news.sky.com