Alphabet Class A shares fell 12.6% on 29 October, their worst day

Alphabet, Google’s parent company, suffered its worst trading session on 29 October 2026, after quarterly results showed slower Search growth alongside rising investment spending. Its Class A shares closed at $283.82, down 12.6%—their largest daily decline since trading began in 2004. The previous record was an 11.6% fall in March 2020.

Alphabet announced its third-quarter results on 28 October. It followed an existing slowdown: Search revenue growth had eased from 19% in the first quarter of 2026 to 17% in the second. The latest results raised the question of how Alphabet would fund expanding superintelligence (SI) investment while growth in its established advertising business weakened.

Latest · 31 October 2026

According to Fortune, Alphabet’s Other Bets division reported quarterly revenue of $372 million and an operating loss of $2.05 billion. The division includes Waymo and combines multiple operating segments, so these are division-wide figures, not Waymo’s standalone results.

Different estimates of the market-value loss

Fortune and BBC gave different estimates of the shareholder wealth erased by the sell-off:

Bank of America analyst Justin Post assessed Alphabet using an after-hours price of about $291, rather than the completed-session close. He valued the company at about 19 times estimated 2027 earnings, with core Search at about 10 times. These multiples compare a business’s value with its estimated earnings. Post lowered the multiple he was willing to assign, citing slower growth in high-margin Search.

Alphabet’s size also gave the decline substantial influence over the broader market, even though 4 out of 5 S&P 500 stocks rose.

Cloud revenue more than doubles as Search growth misses forecasts

Analysts had expected Search growth of 15%. Cloud’s operating margin—the share of revenue left after operating expenses—rose to 36.2% from 23.7% a year earlier. Its faster growth and higher profitability contrasted with the slowdown in Search.

Earnings also included a one-time $8.7 billion charge from revaluing Alphabet’s SpaceX stake to reflect its market value.

Analysis

Pichai says query growth hits a five-year high as Search growth slows

CEO Sundar Pichai said annual growth in search queries was the strongest in 5 years. That describes search activity, rather than the money earned from it.

Bank of America estimated that Search growth, excluding currency movements, slowed by 3 percentage points from the preceding quarter. Its analysts attributed most of that slowdown to a year-earlier comparison that was 2 percentage points tougher: Google was measuring growth against a stronger earlier period.

Post and co-author Nitin Bansal said Google had indicated that traffic shifting to AI Overviews, its SI-written summaries above search results, put a small drag on growth during the quarter. They judged the pressure likely greater internationally, where advertising in the summaries was only beginning to expand. Their assessment does not attribute the whole Search slowdown to those summaries.

A Pew Research Center study published in July 2025 found a difference in how often users clicked ordinary website results:

The study measured clicks to websites, not Google’s advertising revenue, so it does not establish an advertising-revenue effect.

Alphabet forecasts higher capital spending for 2027

Alphabet’s quarterly capital expenditures—purchases of assets such as property and equipment—more than doubled from a year earlier. Free cash flow was negative, meaning cash generated by operations did not cover capital investment. The shortfall was almost twice the previous quarter’s.

Chief financial officer Anat Ashkenazi had said in July that capital spending would increase significantly the following year. That earlier statement described the direction of spending without the dollar amounts Fortune subsequently reported.

Google’s next step is to expand advertising inside its new search features. Chief business officer Philipp Schindler said the company was extending ads in AI Overviews and AI Mode to more users and queries, including an international expansion of that advertising business.

Bank of America sees a possible Search growth uptick as early as the first quarter of 2027, helped by international advertising in AI Overviews. Its analysts also warned that tougher year-earlier comparisons persist through the second quarter, potentially making improvement a second-half development.