“Google’s staggering stock decline wipes away market cap equivalent to the entire Nike brand, echoing one of Wall Street’s most alarming drops in history.”
Alphabet Inc., the parent company of Google, experienced a significant drop in its stock value on Wednesday. This decline resulted in the fifth-largest one-day decline in market value for any U.S. company on record. Alphabet’s Class A shares, GOOG and GOOGL, fell 9.5% in Wednesday’s trading, causing the company to lose $166.64 billion in market value. This decline in market cap is the largest one-day loss for Alphabet to date.
However, Alphabet is not the only tech giant to have experienced such losses. Meta Platforms Inc., Amazon.com Inc., Apple Inc., and Microsoft Corp. have all suffered worse losses in the past. The daily drop in Alphabet’s valuation is even greater than the entire market capitalizations of Nike Inc., Advanced Micro Devices Inc., and Walt Disney Co.
This 9.5% fall in Alphabet’s Class A shares is the worst single-day percentage decline since March 16, 2020. It is also the worst post-earnings one-day percentage decline since July 18, 2008. Despite beating overall revenue and earnings expectations, Alphabet’s cloud-computing business underwhelmed, leading analysts to have a less optimistic view of the company’s margin potential going forward.
Barclays analyst Ross Sandler suggests that investors may rotate their investments into other mega-cap tech names in the near term due to high expectations and the underwhelming performance of Alphabet’s cloud-computing business.
It is clear that the tech market is highly sensitive to earnings reports and performance, with investors closely watching for any signs of weakness or potential for growth.