Alphabet plunges 12.6% on $51.4B capex as AI spending cracks the market
pdamodaran · x · 2026-10-31
DalalBytes' Oct 30 weekly reviews the market crack driven by AI capex — the problem is the bill, not demand.
- Alphabet: revenue +25% to $127.6B, Google Cloud doubled to $30.7B (+103%), but search growth slowed to 12% from 17%, quarterly capex hit $51.4B, free cash flow was negative $9.1B for a second straight quarter — shares fell 12.64%, its worst day on record.
- Amazon: revenue $201.9B (+12%), AWS +39.3% to $46B, operating income +61% to $28.1B, but trailing FCF is negative $42.4B, with 2026 cash capex guided near $220B and higher in 2027.
- Friday: Nasdaq -3.8%, S&P 500 -2.5%, worst days since June; Intel plunged over 30% on a weak Q4 guide.
- Contrast: India rose against the tide — Sensex +1.8% for the week above 74,000, Nifty +2.0% reclaiming 23,000.
Core thesis: the AI trade cracked on its capex bill, not its demand.
Related event: AI Capex Fears Trigger Epic Tech Selloff, Mag 7 Loses $4 Trillion(19 posts)→
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