The 19-year-old Spaniard reached his second ATP Masters final in five weeks and claimed his first ever win over a reigning world number one, overcoming Djokovic 6-7 (5/7), 7-5, 7-6 (7/5) in front of a sell-out home crowd at the Caja Magica.
Alcaraz now owns a tour-leading seven top-10 wins this season, and enters Sunday’s final -- against Stefanos Tsitsipas or defending champion Alexander Zverev -- carrying a nine-match winning streak, having triumphed in Barcelona a couple of weeks ago.
He is the youngest player to defeat a world number one in 17 years. A calm and collected Alcaraz kicked off the match with a service break, thanks to a well-timed cross-court backhand passing shot, and was soon up 3-1 on the top seed.
Djokovic, who turns 35 this month, struck back to draw level for 4-4 as the set fittingly went to a tie-break.
A fired up Djokovic sped to a 5-1 advantage in the breaker and soon got his hands on four set points.
Alcaraz saved the first with an aggressive return and another with an ace. A spot-on drop shot saw the Spaniard save a third set point to narrow his deficit to 5-6 but Djokovic closed out the set on his fourth opportunity after 62 minutes of play.
The players were neck and neck in the second set until Alcaraz upped the ante in game 12, winning key battles at the net and perfectly utilising his drop shot when he needed to.
The Murcia native claimed a break and the set with a sensational get, running down a Djokovic dropper and hitting a winner from outside the doubles alley.
Djokovic staved off three break points on his serve in game four of the decider, digging deep for a 2-2 hold.
The world number one fell to the ground during the next game and needed some medical attention for an open wound on his right hand. Two more break points came and went for Alcaraz on his opponent’s serve as Djokovic battled to hold for 3-3.
It was Djokovic’s turn to put pressure on the Alcaraz serve, but the seventh seed successfully side-stepped a break point to hold in game seven.
The crowd went wild as Alcaraz blasted a forehand winner to get his first match point. Djokovic responded with a steely ace and dug deep to level for 5-5.
It all came down to a final-set tie-break and the Caja Magica was shaking with “si se puede” (Yes you can) chants. Alcaraz drew first blood, opening up a 4-2 gap.
Djokovic saved a second match point for 5-6 but Alcaraz was third time lucky, claiming a statement three-hour 35-minute victory with yet another forehand winner -- his 35th of the match.
Earlier, Nadal wasn’t losing any sleep after his loss to Carlos Alcaraz in the quarterfinals at the Madrid Open.
His focus hasn’t changed. It’s still all about getting ready for the French Open in a few weeks.
“I accept this loss naturally and with tranquility,” Nadal said after Friday’s three-set defeat.
“I’m know the path I have to stay on so I can arrive (in Paris) with real options in two-and-a-half weeks’ time. That’s what I’m working on right now.”
Nadal came to Madrid without being able to prepare properly because of a six-week injury layoff. He said ideally he should have skipped the tournament but in the end was happy with how it turned out.
“I have done what I could,” he said. “I have had better days, worse days. But it has not been a disaster in any case. I have competed with the correct attitude. I have played two, two-and-a-half hours, nearly three, I think three matches, this is a positive outcome.”
The 35-year-old Nadal was trying to win his sixth Madrid Open title. He opened with a straight-set win over Miomir Kecmanovic then needed to save four match points to get past David Goffin in three sets in his second match. He was overpowered in the quarterfinals by the 19-year-old Alcaraz, one of the hottest players on tour this year and considered by many in Spain as Nadal’s successor.
Defending champion Rafael Nadal swept past Greece’s Stefanos Tsitsipas 6-3, 6-4 to advance to his first final on clay this season at the Italian Open on Saturday. The eight-time Rome winner had been stunned by Tsitsipas, seeded eighth, in the semi-finals at the Madrid Open last weekend.
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Running from 9 am to 9 pm each day, the show promises to be a fun-filled day for all the family. Visitors will be able to shop at the Virtus Village, featuring local and international equestrian brands and artisan makers.