Market capitalization plunges 1.2 trillion, US search giant Google encounters "Black Wednesday"

Thanks to CTOnews.com netizen Jiayi for your clue delivery! Shares of Alphabet, the parent company of Google, suffered its biggest drop since the March 2020 outbreak, wiping out about 1.2 trillion yuan in market value on Wednesday, Oct. 26, Beijing time, mainly due to the poor performance of its cloud business in the third quarter, which was disappointing compared with that of rival Microsoft.

As of Wednesday's close, Alphabet class A shares fell $13.20, or 9.51%, to $125.61, the worst performance since a 12% drop on March 16, 2020, wiping out $166.5 billion (1.2 trillion yuan) in market value. Alphabet currently has a market capitalization of $1.58 trillion.

Alphabet shares tumbled 9.51% on Tuesday, local time, Alphabet reported third-quarter results, revenue and earnings per share beat analysts' consensus expectations, but the cloud business performed poorly. Revenue from Google's cloud business was $8.41 billion in the third quarter, below analysts' expectations of $8.64 billion. To make matters worse, Google rival Microsoft also reported results on the same day, but the cloud business was accelerating and 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 salt on Google." Analysts at UBS said.