Abstract:
Alphabet (GOOGL) is experiencing its worst trading day since its listing. The stock fell about 12% on Thursday on the earnings release, its biggest one-day drop since it went public in 2004. The decline wiped out nearly $500 billion in market value, making it the second-largest single-day loss in market capitalization in the history of a U.S.-listed company. The number one in history is NVIDIA: On January 27, 2025, China's DeepSeek caused panic among AI investors, and NVIDIA's market value evaporated by approximately US$593 billion in a single day.
According to Yahoo Finance calculations, if Alphabet closes at about $274.75, a drop of nearly 15%, it will catch up with Nvidia's record. It has now surpassed SpaceX's record single-day loss of $400 billion set on June 22, which previously ranked as the second-largest ever.
In terms of absolute amounts, this is undoubtedly the worst trading day in Alphabet’s history. The company's previous largest single-day market capitalization loss occurred on July 23, amounting to approximately $275 billion. Data from the Bespoke Investment social platform shows that this is also the largest drop after the financial report was released after Alphabet went public; the previous record was a nearly 10% share price drop in July 2008.
This quarterly financial report has arguments for both bulls and bears: Google Cloud revenue doubled to approximately $31 billion; Gemini application users exceeded 1 billion. But search revenue rose 12% to about $63 billion, missing Wall Street expectations of $65 billion. Affected by the surge in AI investment,
free cash flow (cash retained after deducting capital expenditures such as data centers) turned to a loss of approximately US$9 billion
. Huge costs related to AI have also weighed on the company's overall performance.Jeffrey Wodarczak, CEO of Pivotal Research, said: "Shorts will think that this is the first quarter that AI starts to really erode the main search business."
CFRA analyst Angelo Zino is relatively optimistic, telling Yahoo Finance that this pullback "may be a buying opportunity."
Single-day market capitalization losses of this magnitude were unheard of in the past.
According to Yahoo Finance statistics citing Bloomberg data, as of Wednesday, there have been 18 cases of U.S. stocks losing $200 billion or more in single-day market value this year; there will only be 13 cases in 2025, and none before 2022. Alphabet alone has lost about $1.4 trillion in market value since its stock price peak in May.
Amazon will release its earnings report after the market closes on Thursday, which is the last earnings report from the three major cloud vendors this week. If Amazon AWS achieves rapid growth and its cash flow is not affected, it means that the problem lies with Google's own search business; if Amazon also experiences quarterly cash consumption, the entire AI investment transaction logic will be questioned again.
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