Alphabet is having its worst day since March 2020, when Covid shutdowns started in the U.S.

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Sundar Pichai, chief executive officer at Google LLC, speaks during the Google Cloud Next ’19 event in San Francisco, California, U.S., on Tuesday, April 9, 2019.
Michael Short | Bloomberg | Getty Images

Shares of Alphabet dipped more than 6% on Wednesday in the company’s worst day since March 2020 after it released third-quarter earnings Tuesday that missed on the top and bottom lines.

The company reported its weakest quarter of growth since 2013 except for one other period early in the coronavirus pandemic. Revenue growth slowed to 6% from 41% a year earlier as the company contends with a continued downdraft in online ad spending.

The company reported overall advertising revenue of $54.48 billion during the quarter, up slightly from the prior year. Analysts were expecting an increase of about 3% in YouTube ad revenue, but it slid around 2% to $7.07 billion from $7.21 billion a year ago.

Analysts at Bernstein maintained their outperform rating on Alphabet stock but said as Google’s ad revenues decelerate, the company has become “increasingly uncomfortable” over the last six months.

“Google is an ad business first, and digital ads is no longer a safe place to hide,” they said Wednesday.

Raymond James analysts also maintained their outperform rating, citing expectations for long-term ad revenue growth and Google Cloud momentum. The analysts noted Alphabet’s plans to slow head count additions, so they “are optimistic that margins can improve by later 2023.”

Alphabet’s report marks an ominous start to Big Tech earnings week for investors focused on the digital ad market, and analysts at Needham said it is likely bad news for Meta.

“GOOGL talked about more hardware spending going forward. GOOGL and META are both spending more capX and op Ex on hardware, which implies lower [Return on Invested Capital] than in the past when GOOGL was predominantly a software and advertising biz,” they wrote in a Wednesday note.

Meta is scheduled to report earnings after the bell Wednesday.

 — CNBC’s Jennifer Elias and Michael Bloom contributed to this report.

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