Alphabet just had the worst day in its history on the stock market. Shares of the Google parent sank close to 13% on Thursday and erased about $500 billion in market value in a single session.

Only one company has ever lost more in one day. Nvidia shed about $589 billion in January 2025 when a cheap Chinese AI model rattled investors.

The plunge came after Alphabet reported third-quarter results late Wednesday. Revenue climbed 25% to $127.6 billion but still fell a little short of the roughly $128.2 billion Wall Street expected.

Spending scares investors

The bigger worry was cash. Alphabet poured about $51.4 billion into capital spending during the quarter as it races to build data centers for artificial intelligence. Free cash flow swung to a negative $9.07 billion. A year earlier the company generated $24.5 billion.

Alphabet now expects to spend between $195 billion and $205 billion on capital projects this year. It also said it has more than $1 trillion in multiyear spending commitments.

Search slows while cloud soars

Search revenue grew 12% to $63.35 billion. An executive said the company's AI Mode is leading to fewer ads being shown, a sign the shift to chat-style answers could squeeze Google's core money maker.

Google Cloud was the bright spot. Sales in that unit more than doubled with a 103% jump to $30.7 billion as businesses rent computing power for AI.

Wider market feels it

The sell-off weighed on tech stocks across the board. The Nasdaq fell 1.4% while a key index of chip stocks dropped by the same amount. The S&P 500 slipped 0.3% for its first loss in four days. The Dow lost 132 points or about 0.3%.