Kaltbaum Capital Management President Gary Kaltbaum joins “The Claman Countdown” to analyze the Nasdaq’s sharp decline amid concerns over technology and AI spending, Alphabet’s sharp selloff and more.
Google parent Alphabet lost about $500 billion in stock value Thursday after its shares plunged nearly 13% following disappointing quarterly results, marking the second-largest single-day loss of stock value in stock market history.
Alphabet’s Class A shares closed at $283.82, down 12.64%, wiping about $499.8 billion from the company’s market capitalization, according to the Wall Street Journal.
The sell-off follows Wednesday’s release of Alphabet’s third-quarter results, which showed revenue of $127.6 billion, up 25% from a year earlier but below Wall Street expectations.
The results heightened investor concerns about the company’s massive spending on artificial intelligence (AI) and slowing growth in its core search advertising business, which remains a major source of revenue.
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Google CEO Sundar Pichai speaks at a Google I/O event. Alphabet shares plunged after disappointing quarterly results and concerns about the cost of expanding its AI operations. (David Paul Morris/Bloomberg via Getty Images, file/Getty Images)
Google search revenue rose 12% from a year earlier, up from 17% in the previous quarter, heightening concerns about the company’s ability to maintain growth as AI-powered search tools reshape the industry.
Alphabet spent about $51.4 billion on capital expenditures during the quarter, with much of it going toward the data centers and IT infrastructure needed to support its expanding AI operations.
The company expects capital spending to reach between $195 billion and $205 billion this year, with spending expected to increase significantly in 2027, according to a previous FOX Business report.
Despite these concerns, Alphabet’s cloud computing business has continued to grow rapidly.
Google Cloud revenue more than doubled to $30.7 billion, an increase of 103% from the previous year, beating analysts’ expectations of $29.2 billion.
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Alphabet suffered a historic stock sell-off as investors raised concerns about its massive spending on AI. (David Paul Morris/Bloomberg via Getty Images, file/Getty Images)
This growth reflects strong demand for AI services, but the costs required to meet this demand could put pressure on profitability.
Anat Ashkenazi, Alphabet’s chief financial officer, warned that Google Cloud could face near-term pressure on its profit margins as the company relies on external computing capacity to meet demand, FOX Business previously reported.
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The findings highlight a growing challenge for big tech companies as they invest billions in AI infrastructure while investors seek evidence that these investments will generate sustainable profits.
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Thursday’s drop surpassed Alphabet’s previous record single-day market value loss of about $275 billion in July, according to Forbes.
Nvidia holds the record for the largest single-day loss in market value after losing approximately $589 billion in January 2025.
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