The Spaniard was beaten 6-1 7-5 6-4 by unseeded Dutchman Botic van de Zandschulp in the second round.
Alcaraz never recovered from a shaky start and made unforced errors throughout as Van de Zandschulp ended the French Open and Wimbledon champion's 15-match winning run at the majors.
The 21-year-old was on the back foot early on as Van de Zandschulp claimed the opening three games with some resolute defending from the back of the court, and the Dutchman broke again in the sixth game en route to taking the first set.
Alcaraz produced a stunning forehand pass to hold serve in the first game of the next set but the four-times major winner's struggles to close out points resurfaced as Van de Zandschulp broke for a 2-1 lead.
A tactical tweak to return serve from deeper helped Alcaraz break back immediately but the 2022 champion gifted his opponent another break with a double fault and Van de Zandschulp went on to comfortably double his advantage in the match.
After briefly leaving the court before the third set, Alcaraz found himself in deeper trouble after a wayward forehand handed Van de Zandschulp a break.
He hit back immediately and found his smile again, but world number 74 Van de Zandschulp got his nose in front and completed a stunning upset on serve.
"Actually I am a little bit lost for words. It's been an incredible evening here," said Van de Zandschulp. "I think from point one here today I believed (I had) a chance.
"I had some nerves but I think if you want to beat one of these guys you have to be unbelievably calm and keep your head there."
-Reuters