Page, Brin fortunes sink as Alphabet shares tumble

Google co-founders Larry Page and Sergey Brin lost about $60 billion in combined paper wealth on Thursday, October 29. Shares of Alphabet ↘ 1.45% fell more than 12% after the company's third-quarter results missed Wall Street forecasts. Forbes estimated that Page lost about $31 billion and Brin about $29 billion by Thursday morning. Both still ranked fourth and fifth on Forbes' real-time list of the world's richest people.forbes.com

The losses came from one of the worst trading days in Alphabet's history. They show how closely the two founders' fortunes depend on investor confidence in Google Search. Each owns roughly 3% of Alphabet, which makes them its largest individual shareholders, and together they hold majority voting control, according to Forbes.forbes.com

A rare double miss

Alphabet reported results after the market closed on Wednesday. Revenue rose 25% to $127.58 billion, short of the $128.22 billion analysts expected, and adjusted earnings of $2.67 per share fell below the $3.02 estimate. CNBC reported it was the company's first miss on both revenue and profit in nearly four years. Search revenue grew 12% to $63.35 billion, below the $64.96 billion forecast. Search growth has now slowed for three straight quarters, from 19% in the first quarter and 17% in the second, CNBC reported.cnbc.com+1

Chief Business Officer Philipp Schindler blamed part of the slowdown on the growing use of AI Mode, a chatbot-style tab in Google Search where ads earn less, according to Reuters. Early Thursday, Bloomberg reported that the selloff had erased more than $500 billion of Alphabet's market value.bloomberg.com+1

Spending pressure builds

Investors also reacted to Alphabet's spending. The company spent $51.4 billion on capital expenditures in the quarter and reported negative free cash flow of $9.07 billion. Analysts had expected a deficit of about $2.70 billion, CNBC reported. Google Cloud revenue more than doubled to $30.71 billion, but that was not enough to make up for a $1.4 billion shortfall in advertising, Reuters reported.reuters.com+1

"In a market worried about AI cannibalizing the franchise, investors need to see search accelerating, not decelerating," Aptus Capital Advisors portfolio manager Dave Wagner told Reuters.reuters.com

Analysts turn cautious

Citizens downgraded Alphabet to market perform. Analyst Andrew Boone wrote that "while query growth reached a five-year high, monetization appears to be challenged," CNBC reported. Microsoft ↘ 1.55%, which also reported this week, was little changed on Thursday, according to CNBC.cnbc.com+1

Alphabet is not the only company under pressure for heavy AI spending. Forbes noted that Meta ↘ 1.53%, Amazon Amazon.com, Inc. ↘ 1.41% and Oracle ↘ 6.37% have all faced investor scrutiny over big commitments to data centers, chips and power, according to Forbes.forbes.com