Alphabet, the parent company of Google, suffered the worst day in its two-decade history as a listed company this week, as investors balked at the enormous sums Big Tech is pouring into artificial intelligence. The sell-off spread on Friday, when a collapse in Intel’s shares and a weak report from Amazon helped drag the Nasdaq to its worst session since June.
Google’s record fall
Alphabet’s Class A shares fell 12.6% on Thursday 29 October to $283.82, Fortune reported, the steepest one-day decline since the company floated in 2004. The previous record, an 11.6% drop, came during the pandemic panic of March 2020. Around $480 billion was wiped from the company’s market value in a single session.
The trigger was Alphabet’s third-quarter report. Revenue from search, Google’s core money-maker, grew 12% to about $63.4 billion, short of the 15% growth analysts had expected, according to Fortune. Entrepreneur, citing The Wall Street Journal, reported that search growth had slowed from 19% in the first quarter and 17% in the second. Google Services revenue overall also missed forecasts.
The bigger worry was spending. Alphabet’s capital expenditure reached $51.4 billion in the quarter, more than double a year earlier, and free cash flow turned negative at minus $9.1 billion, Fortune reported. The company expects capital spending of roughly $200 billion this year and about $300 billion in 2027, largely on data centres and AI models.
There was strong news inside the results. Google Cloud revenue more than doubled to about $30.7 billion, with margins improving sharply. But for many investors the slowing search business, combined with spiralling costs, raised the question of whether AI is helping Google or eating into the product that pays for everything else. Bank of America kept a buy rating on the stock but cut its price target, pointing to slower growth in high-margin search.
A mixed picture across Big Tech
Not every company was punished. Microsoft, which reported on Wednesday, beat expectations: revenue rose 19% to $92.3 billion and its Azure cloud business grew 48%, Fortune reported. Its capital spending of $45.2 billion was actually below forecasts, which finance chief Amy Hood put down to delays in third-party data-centre capacity. She said the company still has demand that exceeds supply and expects calendar-year capital spending of around $170 billion. Microsoft said about $10 billion of its quarterly revenue came from commercial arrangements with OpenAI.
Amazon’s results on Thursday evening added to the unease. Sales rose 12% to $201.9 billion and its AWS cloud arm grew 39%, but earnings per share missed estimates and the company’s free cash flow over the past 12 months was an outflow of about $42.4 billion, which it linked mainly to AI investment, according to StockTitan’s market coverage.
Then came Intel. The chipmaker’s shares were down about 28% in Friday morning trading after it forecast fourth-quarter revenue of $15 billion to $16 billion, well below analysts’ expectations of about $17.1 billion. Its PC business shrank while its data-centre and AI revenue rose sharply, and its finance chief warned the PC slowdown would last at least into the first half of next year. Chip stocks including AMD, Arm and Nvidia fell in sympathy.
By Friday’s close the Nasdaq had dropped 2.86% and the S&P 500 1.82%, Yahoo Finance reported. The Nasdaq ended October more than 5% lower, its worst month since March 2025.
Why it matters beyond Wall Street
The so-called hyperscalers are spending hundreds of billions of dollars on chips, servers and the data centres that run AI systems. That spending underpins demand for everything from Nvidia’s processors to electricity grids, and Ireland, which hosts major data-centre and European operations for Google, Microsoft, Amazon and Intel, is closely exposed to how these companies fare. A pull-back in investor confidence does not mean the spending will stop, but it puts pressure on companies to show that AI is generating returns rather than simply consuming cash.
What happens next
Investors will look to the coming weeks for signs that AI spending is translating into revenue, particularly in cloud computing, which remains the strongest part of these businesses. Nvidia’s results, due in November, will be the next major test of the AI trade. For Alphabet, the key question is whether search growth stabilises as Google builds AI deeper into its core product. For Intel, attention turns to whether its AI and data-centre growth can offset a weak PC market.
This article is for information only and is not financial advice.
Sources
- Fortune: Alphabet just had its worst day as a public company (29 October 2026)
- Entrepreneur: Alphabet Just Lost $500 Billion in Its Worst Day Ever (29 October 2026)
- Fortune: Microsoft’s cloud growth accelerates, and so too does the spending (28 October 2026)
- StockTitan: Stock Market Today Live October 30, 2026 (30 October 2026)
- Yahoo Finance: Stock market today, October 30 (30 October 2026)
Featured image: Google Campus, Mountain View, CA by Austin McKinley, CC BY 3.0, via Wikimedia Commons.
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