Tech Stocks Lose $1 Trillion in a Day as Alphabet Cash Flow Misses

On Friday, October 30, the Nasdaq 100 lost more than $1 trillion in market value. The day before, Alphabet shares (Google's parent company) fell 12.6%, wiping out roughly half a trillion dollars in market value. Investors had expected Alphabet's free cash flow (the money left over after operating costs and growth investments) to come in at minus $2.23 billion. The actual number was minus $9.1 billion, almost four times worse.

The drop followed a sharp jump in the company's AI infrastructure spending in the third quarter. This is one of the first times investors have reacted negatively to an actual AI spending figure, rather than to general growth expectations. It looks like big companies pouring money into AI data centers are getting punished here. It is still unclear whether this spreads to companies that sell AI models.