Alphabet's stock fell sharply on Thursday after the Google parent reported third-quarter results that fell short of Wall Street's expectations, a selloff that put the company on pace for the steepest single-day drop in its history as a public company.

The company posted revenue of $127.6 billion, up 25% from a year earlier but below the $128.2 billion analysts had forecast. The company held its 2026 capital expenditure guidance at $195 billion to $205 billion but said spending would rise significantly again in 2027.

Shares dropped as much as 12% to 13% in the session, a decline large enough that, if it held, would mark Alphabet's worst post-earnings reaction on record. The stock has now fallen well below the roughly $355 price at which the company sold new shares earlier this year.

The damage extended to Alphabet's founders. Forbes estimated that Larry Page and Sergey Brin, who together still hold significant ownership stakes and voting power in the company, lost a combined $60 billion in paper wealth as the stock fell, with Page's loss put at roughly $31 billion and Brin's at about $29 billion.

Much of the market's concern centered on signs that artificial intelligence is reshaping Google's core search business in ways that are not yet clearly favorable to its bottom line. CEO Sundar Pichai told investors that AI investments were still driving overall growth in search queries, including commercial ones, and expressed confidence in the company's direction.

Analysts were divided on what the results meant. Gil Luria of D.A. Davidson suggested Alphabet consider splitting its search and cloud businesses. The Wall Street Journal, by contrast, argued that Alphabet retains the underlying strengths needed to compete through an AI-driven pullback in investor sentiment, despite the stock's decline.

Microsoft, which reported earnings the same day, moved in the opposite direction, with shares rising after its capital spending came in below expectations even as its free cash flow also declined. The contrast sharpened investor focus on how differently the two companies are being rewarded, or punished, for their AI spending plans.

References

1. 1.CNBC — reported Alphabet shares fell 12%, putting it on pace for its biggest-ever post-earnings drop, and cited capex guidance of $195B-$205B for 2026
2. 2.CNBC — reported the 'first real sign that AI is taking a bite out of search' and quoted analyst Ben Barringer and Gil Luria of D.A. Davidson
3. 3.Forbes/Gadget Review — reported Larry Page and Sergey Brin's combined $60 billion paper loss, with individual estimates of roughly $31 billion and $29 billion
4. 4.WSJ — reported that Alphabet retains the elements needed to compete despite the AI-driven stock decline
5. 5.AP — reported Google missed Wall Street expectations and Alphabet stock fell in after-hours trading
6. 6.SEC 8-K filing — confirmed Alphabet Q3 2026 financial figures including revenue, EPS, net income, and Pichai's statement
7. 7.Benzinga — quoted Philipp Schindler on AI Overviews growth being offset by lower AI Mode monetization, and Pichai's comments on AI driving search growth
8. 8.Gurufocus — confirmed Alphabet Q3 2026 revenue of $127.6 billion and EPS of $2.12 missed estimates
9. 9.Delphis Lens — reported Alphabet's capex guidance details and stock price relative to its June share offering price of about $355
10. 10.Gadget Review (https://www.gadgetreview.com/alphabets-worst-single-day-drop-erases-60b-for-founders) — reports that Forbes estimated Page's paper loss at roughly $31 billion and Brin's at approximately $29 billion