Google’s parent company has just had the worst trading day in its two decades as a listed company, and the reason was not weak growth. Alphabet shares fell about 13% on Thursday after third-quarter results showed that the cost of building artificial intelligence infrastructure is now running ahead of the cash its businesses generate. Close to $500 billion of market value disappeared in one session, the second-largest single-day loss on record for a US-listed company, behind only Nvidia’s slide in January 2025.
The paradox is that many of the headline numbers were strong. Revenue rose about 25% to roughly $127.6 billion. Google Cloud more than doubled, growing 103% to about $30.7 billion for the quarter, and the Gemini app has now passed one billion users.
Spending races ahead of cash
The trouble was on the other side of the ledger. Alphabet spent about $51 billion on capital projects in the quarter, much of it on servers and data centres for AI, up from roughly $45 billion three months earlier. Free cash flow turned negative by about $9 billion, the second negative quarter in a row. To keep funding the build-out, the company issued around $28.7 billion of senior unsecured debt and raised about $12.4 billion by selling shares into the market.
Search, the company’s core profit engine, also gave investors pause. Search revenue grew 12% to about $63 billion, short of analyst estimates of around $65 billion. Some analysts read that as an early sign that AI assistants may be nibbling at traditional search, while others argued the sell-off had gone too far. Earnings per share also missed forecasts, largely because of an $8.7 billion loss on the company’s equity investments.
Alphabet has said its capital spending this year could reach about $205 billion and has signalled another significant increase in 2027. Markets are no longer taking that ambition on trust.
The contrast with Microsoft, which reported on the same evening, was sharp. Microsoft’s revenue rose 19% to $92.3 billion and its Azure cloud business grew 48%. It spent $45.2 billion on capital projects in the quarter, yet still produced about $18.6 billion of free cash flow, and its commercial order backlog jumped 73% to $677 billion. Its shares held roughly steady while Alphabet’s tumbled.
What it means here
For Bangladesh, the story is less about share prices than about who ultimately pays for the AI boom. The biggest cloud companies are spending at a pace investors now question, and that money has to be recovered through cloud bills, advertising and subscriptions. Local businesses that rely on Google Workspace, Google Cloud or Google’s advertising tools should expect continued price changes and more AI features tucked into paid tiers.
There is also an infrastructure angle. Google has no cloud region in Bangladesh, so local customers are largely served from facilities in India and Singapore. As capacity grows in those hubs, Bangladeshi companies gain access to more powerful AI tools, but data-residency rules and the cost of international bandwidth will still decide how practical those services are at home.
Finally, the episode carries a lesson for local founders and investors pitching AI products: even the strongest growth story is now being judged on cash flow, not just on ambition.
