Alphabet and Intel Erase More Than $600 Billion Amid Technology Stock Sell-Off
Key Facts
A two-day sell-off erased more than $600 billion in market value from Alphabet and Intel, according to Benzinga, in a retreat that reflected mounting investor concern over heavy spending on artificial intelligence. The source did not specify a more precise time frame than two days, while the companies’ losses came amid broader pressure on technology stocks. In the October 30 session, Intel shares fell 28.6%, while Alphabet shares declined 1.4% after dropping 12.6% in the previous session, according to Reuters. The Nasdaq Composite also lost 2.86% to close at 25,437 points, and the S&P 500 fell 1.82% to 7,580.07 points. The drivers of the declines differed, ranging from concerns about Alphabet’s ability to turn AI investments into returns to operational challenges and weak financial forecasts at Intel.
Alphabet came under pressure despite strong revenue growth in the third quarter of 2026. Revenue rose 25% to $127.6 billion, while Google Cloud revenue increased 103% to $30.7 billion, according to the company’s results filed with the U.S. Securities and Exchange Commission. The chief executive said the company had recorded its “13th consecutive quarter of double-digit revenue growth.” But revenue growth did not dispel investor concerns about the scale of investment needed to continue expanding in AI. Capital expenditures reached $51.4 billion in the three months ended September 30, exceeding operating cash flow of $42.3 billion over the same period. The Associated Press pointed to a decline in free cash flow, while Reuters linked pressure on the stock to expectations that returns on heavy AI spending may not justify it.
Alphabet’s results showed a mix of business growth and lower profitability compared with a year earlier. Net income available to common shareholders was $26.17 billion in the third quarter of 2026, versus $34.979 billion in the same quarter of 2025. Diluted earnings per share fell to $2.12 from $2.87. After the results were announced, the stock fell more than 10% in after-hours trading on October 28, reaching $289.95, according to the Associated Press. At the October 30 close, the stock stood at $279.84, compared with $324.89 on October 28, according to EL7 data. The figures highlight the contrast between accelerating cloud revenue and market concerns over spending, liquidity and profitability.
Intel, meanwhile, faced operational pressure tied to weak PC demand and its fourth-quarter outlook. The company forecast fourth-quarter 2026 revenue of between $15 billion and $16 billion, below the analyst consensus of $17.07 billion. It also forecast adjusted earnings of $0.25 per share, compared with an estimate of $0.43. The company said weak demand could persist through the first half of 2027, and that an explosion at its plant in Israel could reduce revenue by about $600 million over two quarters, according to Reuters. Third-quarter disclosures showed that sales volume for client products, including laptops and desktops, fell 14% year over year, offset by a 9% increase in average selling prices.
While a slowing PC market weighed on the outlook, Intel reported third-quarter revenue growth. Revenue reached $16.5 billion, up 21% from the same period in 2025, according to the company’s filing. The chief financial officer said data-center revenue had posted its “strongest growth in 15 years,” but said the PC market slowdown could continue “at least through the first half of next year.” Intel shares closed at $65.76 on October 30, compared with $95.53 on October 28, according to EL7 data. In the credit market, five-year credit default swaps on the company’s debt widened by 17.5 basis points to 124.75 basis points on October 30, a record, according to Reuters. Intel ended September with $21.84 billion in cash and equivalents, against $46.32 billion in long-term debt.
The sell-off spread to other technology stocks and the semiconductor index. Apple shares fell 1.23%, META declined 1.53% and NVIDIA dropped 4.22% on October 30, according to Reuters. The PHLX Semiconductor Index fell more than 7% in the session, its biggest daily decline since late June. Against this backdrop, debit balances in securities margin accounts stood at about $1.480 trillion in September, up from $1.454 trillion in August, but remained below $1.502 trillion in June, according to FINRA. These balances offer an indication of borrowing in margin accounts, but do not by themselves establish that borrowing caused the sell-off. The results of capital spending and the outlook for PC demand remain central to upcoming figures, with Alphabet expecting to recognize more than 55% of its remaining performance obligations over 24 months.