Alphabet shares (NASDAQ: GOOGL, GOOG) fell about 12% to 13% in U.S. trading on Oct. 29, 2026, following third-quarter earnings that fell short of expectations. By 1:30 p.m. Eastern, Google’s parent company had lost about $480 billion in market value, which would have been the second-largest single-day valuation loss in U.S. stock market history, according to Forbes.
Google Cloud’s robust performance was offset by the rising costs of artificial intelligence infrastructure and decelerating advertising growth.
Why is Google stock down?
Alphabet’s quarterly revenue soared 25% to $127.6 billion from a year earlier. Google Search revenue increased 12% to $63.35 billion, but fell short of analyst forecasts.
In the earnings call, Google admitted that the slower growth of Search revenue was due to lower monetization in AI Mode.
Capital expenditures were $51.4 billion, producing negative quarterly free cash flow of $9.1 billion. Alphabet expects to significantly increase infrastructure spending in 2027.
What’s different in Alphabet’s Q3 earnings?
Earnings per share were $2.12 and net income fell 25% to $26.17 billion. Operating income rose 30% to $40.6 billion, despite a $8.7 billion loss on equity investments that hurt reported profit.
Google Cloud revenue doubled to $30.7 billion, up 103% year over year. And cloud operating income was over $11.1 billion.
Alphabet’s next challenge is how to monetize the growing use of AI into advertising dollars while still dealing with the costs of infrastructure. Investors will be looking for profitability in Cloud, monetization of Search and what the cash flow looks like going forward.
The $480 billion estimate for Alphabet’s fall on Oct. 29 is a loss of stock-market valuation, not the equivalent in cash. The market value will be adjusted at the end of the day to the closing share price.