Alphabet loses $500 billion in market value as AI spending spooks Wall Street

What's Happening

• Alphabet shares plunged 12% following its earnings report, wiping out $500 billion in market capitalization during its worst trading day on record.
• Core search advertising growth decelerated to 12% in the third quarter, missing analyst estimates and breaking a four-quarter streak of beats.
• Google spent $51.4 billion on infrastructure in the third quarter, pushing negative free cash flow to $9.1 billion as the company builds AI capacity.
• Google is expanding advertisements within its AI-powered search features to 10 new countries, including Canada and India.
• Investors reacted to Big Tech's $740 billion capital expenditure plans, sending the Nasdaq down 2.9% and driving a 30% drop in Intel shares.

Why It Matters

Investors are punishing tech companies for massive AI infrastructure spending that outpaces revenue growth. Google faces a specific threat as its expensive generative AI search features cannibalize its profitable traditional search business.