Alphabet has its worst stock day since going public in 2004
Shares of Alphabet, Google's parent company, closed down about 13% on Thursday, its worst day since its 2004 IPO, erasing roughly $500 billion in market value. Its third-quarter sales fell short of expectations, and investors were concerned about free cash flow and the return on its AI spending, even though Google Cloud revenue more than doubled. The Nasdaq fell about 1.4% and the S&P 500 and Dow also closed lower.
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Why it matters
Alphabet is one of the largest companies in major U.S. stock indexes, so its drop pulled down the Nasdaq, which fell about 1.4% on Thursday. People with retirement or index funds that hold large tech stocks saw part of that move. Investors' concern was about how much the company is spending on AI compared with the cash it brings in.
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