Google owner Alphabet loses a record $500bn on fears that its OWN AI search is eating into ad profits
A Google DeepMind promotional screen introducing Gemini, the AI brand whose new Gemini 4 Carbon model Sundar Pichai unveiled just before Alphabet's earnings call as its shares tumbled over 10%.A data graphic showing Alphabet's share price movement, as an $8.7bn loss on equity investments tied to its SpaceX stake compounded the earnings miss.
Alphabet's net profit fell 25% to $26.2bn in the third quarter, missing Wall Street expectations on nearly every key metric. Advertising revenue came in at $82bn against a forecast of $83.4bn, with the company's own AI search mode blamed for the sharp slowdown. The resulting sell-off stripped roughly $500bn from Alphabet's market capitalisation — placing it on course to rank as history's second-biggest single-day loss by a listed company, surpassed only by Nvidia's $589bn wipeout in January 2025.
For the second quarter running, Alphabet recorded free cash flow of negative $9.1bn — a dramatic turnaround for a business long considered one of the technology sector's most reliable cash generators.
Search advertising revenue grew just 12%, down from 17% the previous quarter, as AI Mode's conversational responses drew users away from the traditional results page where ads are concentrated.
