If you Google “What was Google’s worst day ever?” the answer is now October 29. Shares of parent company Alphabet plunged, erasing roughly $500 billion in market value, according to The Wall Street Journal. The drop pulled the whole Nasdaq down with it and made investors more worried that companies are spending more on AI than they’re getting back.

The cause of the bloodbath? Wednesday’s earnings report. Google Services, the unit that includes search ads, YouTube and subscriptions, brought in $96.3 billion. Wall Street expected $98.5 billion. Search revenue grew 12% year over year in the third quarter, a slowdown from 17% in the second quarter and 19% in the first.

Google also reported higher-than-expected operating expenses and negative free cash flow as it pours money into data centers and new AI models. Investors have tolerated Big Tech’s AI spending spree largely because core businesses kept churning out profits. That cushion now looks thinner.

Mike O’Rourke, chief market strategist at JonesTrading, tells the Journal that Google “showed vulnerability to AI.” The stock also formed what’s known as a “death cross.” That’s when a stock’s short-term average price drops below its long-term average, which some analysts see as a sign it could fall even further.

If you Google “What was Google’s worst day ever?” the answer is now October 29. Shares of parent company Alphabet plunged, erasing roughly $500 billion in market value, according to The Wall Street Journal. The drop pulled the whole Nasdaq down with it and made investors more worried that companies are spending more on AI than they’re getting back.

The cause of the bloodbath? Wednesday’s earnings report. Google Services, the unit that includes search ads, YouTube and subscriptions, brought in $96.3 billion. Wall Street expected $98.5 billion. Search revenue grew 12% year over year in the third quarter, a slowdown from 17% in the second quarter and 19% in the first.

Google also reported higher-than-expected operating expenses and negative free cash flow as it pours money into data centers and new AI models. Investors have tolerated Big Tech’s AI spending spree largely because core businesses kept churning out profits. That cushion now looks thinner.

Mike O’Rourke, chief market strategist at JonesTrading, tells the Journal that Google “showed vulnerability to AI.” The stock also formed what’s known as a “death cross.” That’s when a stock’s short-term average price drops below its long-term average, which some analysts see as a sign it could fall even further.