Alphabet stock plunge wipes $500 billion but analysts see long-term AI opportunity

Alphabet shares plunged about 13% on October 29, erasing roughly $500 billion in market value after its third-quarter earnings report, marking one of the worst single-day losses in U.S. stock market history. The selloff was driven by a $91 billion negative free cash flow, as capital expenditures of $51.4 billion exceeded operating cash flow, alongside a raised 2026 capex budget of up to $205 billion. However, Google Cloud revenue doubled to $30.7 billion, and its custom TPU chips have attracted major clients like Apple and Meta. Analysts argue the market overreacted to short-term financial pressures, noting Gemini has surpassed 1 billion users and the company's vertically integrated AI ecosystem—spanning hardware, software, and cloud—offers a compelling long-term buying opportunity for investors willing to tolerate volatility.