Alphabet Shares Plunge $500B After Earnings Miss

Shares of Alphabet fell 12% on Thursday, wiping approximately half a trillion dollars from market value in its worst single-day performance ever. The decline followed the company's quarterly earnings report, which showed revenue growth to $127.6 billion but missed analyst expectations at $128 billion by roughly three hundred million dollars. While operating income rose significantly due to Google Cloud's record-breaking 103% increase and a higher operating margin of 32%, overall GAAP earnings per share dropped from $2.87 to $2.12 because other expenses totaled $8.2 billion, including an eleven-billion-dollar loss on equity securities linked to its investment in SpaceX. Investors expressed concern that slowing growth in the core search advertising business—its slowest rate since 2023—is occurring alongside heavy spending on artificial intelligence infrastructure. This has reignited fears among analysts that consumers will increasingly use AI chatbots for traditional searches, potentially displacing revenue before Google can pivot its strategy.