Alphabet Sheds $500 Billion in a Single Day Despite Cloud Growth of 103%

Alphabet experienced its worst day ever, dropping over 13% after Q3 2026 earnings. While revenue surged 25% to $127.6 billion and Google Cloud revenue doubled to $30.7 billion, record capital expenditures of $51.4 billion for AI infrastructure caused net income to fall 25% and resulted in negative free cash flow of $9.1 billion. The market is concerned that massive AI spending is currently outweighing gains, and slowing Google Search growth raises questions about AI's long-term impact on the company's core business.