Market value plummets by 1.2 trillion, US search giant Google encounters "Black Wednesday"

At the close of U.S. stocks on Wednesday, October 26, Beijing time, the stock price of Google’s parent company Alphabet suffered its largest decline since the outbreak of the epidemic in March 2020. The market value evaporated by approximately 1.2 trillion yuan, mainly due to the cloud business in the third quarter. The performance fell short of expectations and was disappointing compared with the performance of rival Microsoft's cloud business.

As of Wednesday's close, Alphabet's Class A shares fell $13.20 to close at $125.61, a drop of 9.51%, marking the worst performance since a 12% drop on March 16, 2020. The market value evaporated by US$166.5 billion (approximately 1.2 trillion yuan). Currently, Alphabet has a market capitalization of $1.58 trillion left.

Alphabet’s stock price fell 9.51%

On Tuesday local time, Alphabet released its third-quarter financial report, revenue and per share Earnings both beat consensus analyst estimates, but the cloud business underperformed. Google Cloud's third-quarter revenue was $8.41 billion, missing analysts' expectations of $8.64 billion. To make matters worse, Google's rival Microsoft also released its financial report on the same day, but its cloud business is accelerating and is better than expected. Investors are worried that Alphabet's cloud computing market share will be eroded by Microsoft.

"The performance of Google's cloud business has been disappointing, and the better-than-expected growth of Microsoft's Azure cloud business has sprinkled a pinch of salt on Google." UBS analysts said.

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