Alphabet Inc. shares fell nearly 13 percent on Thursday, wiping out approximately $500 billion in market value in the company's worst single-day decline since its 2004 initial public offering.

The drop marked the second-largest one-day market capitalization loss in U.S. stock market history, trailing only Nvidia's $593 billion rout in January 2025. Alphabet closed at around $283 per share, down more than 12.6 percent.

Investors reacted sharply to the company's third-quarter earnings, released after the bell on Wednesday. Revenue reached $127.6 billion, up 25 percent year over year but below analyst forecasts. Search advertising revenue, which accounts for roughly half of total sales, grew 12 percent to $63.4 billion, missing estimates and slowing from prior quarters.

Company executives noted that its new Super Intelligence-powered search features, which deliver conversational answers rather than traditional links, have led to lower monetization through advertisements. Free cash flow turned deeply negative at minus $9.1 billion as capital expenditures surged to $51.4 billion, driven by investments in data centers and computing infrastructure for Super Intelligence.

Alphabet maintained its full-year capital spending guidance between $195 billion and $205 billion, with further increases expected in 2027. Google Cloud revenue more than doubled to $30.7 billion and beat estimates, yet the gains failed to offset broader concerns over slowing core business growth and elevated costs.

The selloff weighed on broader markets, contributing to a decline in the Nasdaq Composite. Alphabet's plunge follows similar pressures on other technology firms reporting results this week.

This event underscores ongoing market scrutiny of major technology companies balancing substantial infrastructure outlays for Super Intelligence capabilities against returns from established revenue streams.