Kaltbaum Capital Management President Gary Kaltbaum joins ‘The Claman Countdown’ to analyze the Nasdaq’s sharp decline amid concerns about tech and AI spending, the sale of Alphabet and more.
Google parent Alphabet lost about $500 billion in market value Thursday after its shares tumbled nearly 13% following disappointing quarterly earnings, marking the second-biggest one-day market value loss in stock market history.
Alphabet’s Class A shares closed at $283.82, down 12.64%, wiping about $499.8 billion off the company’s market capitalization, according to The Wall Street Journal.
The sale followed Alphabet’s third-quarter earnings report Wednesday, which showed revenue of $127.6 billion, up 25% from a year earlier but below Wall Street expectations.
The results add to investor concerns about the company’s massive spending on artificial intelligence (AI) and slowing growth in its core search advertising business, which remains its main source of revenue.
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Google CEO Sundar Pichai spoke during the Google I/O event. Alphabet shares tumbled after quarterly earnings and worries about the cost of expanding its AI operations. (David Paul Morris/Bloomberg via Getty Images, Image/Getty Images)
Google Search revenue rose 12% from a year earlier, down from 17% growth in the previous quarter, raising concerns about the company’s ability to sustain growth as AI-powered search tools reshape the industry.
Alphabet spent about $51.4 billion on capital expenditures during the quarter, much of which was directed toward data centers and computing infrastructure needed to support its growing AI operations.
The company expects capital expenditures to reach between $195 billion and $205 billion this year, with spending forecast to increase significantly in 2027, according to a previous FOX Business report.
Despite the concerns, Alphabet’s cloud computing business continues to grow at a rapid pace.
Google Cloud revenue more than doubled to $30.7 billion, up 103% from a year earlier, beating analysts’ expectations of $29.2 billion.
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Alphabet is experiencing a historic sell-off in its shares as investors worry about spending too much on AI. (David Paul Morris/Bloomberg via Getty Images, Image/Getty Images)
That growth reflects strong demand for AI services, but the cost of meeting that demand can hurt profits.
Alphabet Chief Financial Officer Anat Ashkenazi warned that Google Cloud could face short-term pressure on profit margins as the company relies on outside computing capacity to meet demand, FOX Business previously reported.
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The results underscore the growing challenges for major tech companies as they pour billions into AI infrastructure as investors look for evidence that their investments will yield sustainable returns.
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Thursday’s decline surpassed Alphabet’s previous record one-day market value loss of about $275 billion in July, according to Forbes.
Nvidia holds the record for the biggest one-day loss in market value after shedding about $589 billion in January 2025.