Alphabet market value plunges 500 billion dollars after earnings report

Google parent company Alphabet suffered a record drop in market value on Thursday, October 29. Outlets gave varying estimates for the loss and share drop, with PYMNTS, Bloomberg, NBC News, and others reporting a $500 billion loss and a 13 percent drop, while Forbes Business cited a $480 billion market capitalization loss on a 12 percent share decline. Fortune reported that the fall dragged down the U.S. stock market following Alphabet's release of its quarterly results on Wednesday, October 28. [1][2][4][5][8][9][10][11][12]

The Wall Street Journal reported that the market decline followed quarterly results that stoked investor concerns over the impact of artificial intelligence on Google Search, according to PYMNTS. Fortune noted that the summer growth figures were weaker than analysts expected, raising questions about whether the company's massive investments in artificial intelligence technology will yield adequate returns. Forbes Business added that investors balked at Alphabet spending $51.4 billion on capital expenditures, including buying data centers and expanding power capacity, in just three months. [1][2][6]

The drop impacted broad market indexes despite gains in most individual stocks. Fortune reported that the S&P 500 fell 0.3 percent, marking its first loss in four days, even though four out of every five stocks in the index climbed. Fortune also reported that the Nasdaq composite fell 1.4 percent, while the Dow Jones Industrial Average fell 132 points, or 0.3 percent. [2]

Alphabet was created through a restructuring of Google on October 2, 2015, as a multinational tech conglomerate based in Mountain View, California. As FTMQ Business reported earlier, Alphabet quarterly revenue rose 25 percent to $127.6 billion in its latest results, while quarterly profits fell 25 percent, and negative free cash flow exceeded $9 billion. [14][16]