Shares in Google's parent company Alphabet plunged Thursday by 12.6%, marking its worst day on record, and causing the company's value to shed $500 billion amid artificial intelligence fears.

The drop comes after Google told investors that the quarterly results of Alphabet showed profits at the company fell by a notable 25% in the third quarter.

The company also showed negative free cash flow in excess of $9 billion, which is almost twice the loss of cash Alphabet showed three months ago. Total revenue in the company, however, grew 25% compared to last year, hitting $127.6 billion.

The market value drop is the second largest one-day wipeout in U.S. market history, trailing Nvidia’s $589 billion drop in late January 2025, according to NBC News. 

The company attributed some of its decline to lackluster advertising sales. A senior Alphabet executive said part of the reason ad revenues from searches were underperforming was Google’s own “AI Mode” search feature, which was resulting in fewer ads. 

The drop means Alphabet's market cap is now $3.47 trillion, making it the country's fourth-largest company. Nvidia is first, followed by Apple and Microsoft.

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.