Alphabet's diluted EPS fell 26% to $2.12 in the third quarter, and the stock fell 9.97% after hours to $292.50. CFO Anat Ashkenazi said on the call that an unrealized loss from its SpaceX investment, after SpaceX's share price declined in the quarter, pushed other income to negative $8.2 billion and cut EPS by $0.55; the earnings release itself did not name the holding. Excluding that impact, EPS would be about $2.67, still $0.34 short of consensus, while operating income rose 30% to $40.576 billion and Google Cloud revenue grew 103% to $30.709 billion. The article notes the loss is noncash and would reverse if SpaceX's price recovers, and that free cash flow was negative $9.065 billion as capital spending reached $51.355 billion.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
GOOGLSpaceXearningscloud computing
Open a keyword to see other news on the same topic.
Related tickers and likely impact
GOOGL
▼ Likely negativeAlphabet Inc. (Class A)
Relevance: high
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.0T |
| Close on 10/28/2026 | 325.61 |
| Change that session | +1.57% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Google Is Paying SpaceX $11 Billion a Year for Compute. Here's the Concentration Risk Nobody Is Pricing In.
Google has started paying SpaceX $920 million per month, or $11 billion per year, to lease xAI's cloud infrastructure through 2029, rather than building more data centers to fill its shortage of Nvidia GPUs. According to Synergy Research Group, Google held 15% of the global cloud infrastructure market in the second quarter of 2026, placing third behind AWS (28%) and Microsoft Azure (20%), while Google Cloud revenue rose from $19.2 billion in 2021 to $58.7 billion in 2025. The deal gives Google access to a cluster of roughly 110,000 GPUs, and Alphabet owns a 4%–5% stake in SpaceX. The author warns the arrangement adds concentration risk: Google is effectively funding xAI's growth into a cloud competitor, it reinforces Nvidia's dominance, and the cluster sits at xAI's centralized facilities, including Colossus in Tennessee, where power failures or disruptions could affect many tenants.
- Analyst explains why you should buy the pullback in Google shares
Mizuho reiterated its Outperform rating and $460 price target on Alphabet and said it is buying the after-hours pullback, with the stock down around 11% premarket. Cloud revenue grew 103% and Cloud margins rose to 36.2% from 35.6% in the second quarter, which Mizuho says suggests TPU margins are approaching core Cloud margins, well above its prior 14% estimate. Search revenue grew 12% excluding currency effects, below Mizuho's 13% estimate and the 15% consensus, as AI Mode monetization still lags traditional Search. Mizuho suspects this will be the last cut to search estimates, but flags a tough margin setup for Cloud heading into 2027 due to higher depreciation and capacity costs.
- Why Are Alphabet Shares Falling More Than 10% Despite Growth in Google Cloud?
Alphabet (NASDAQ: GOOG) shares fell more than 10% in premarket trading on Wednesday after third-quarter earnings came in below Wall Street expectations, as slower growth in search advertising overshadowed strong cloud results. Earnings per share were $2.12 against a consensus of $3.02, while revenue rose 25% to $127.6 billion, slightly above the $127.22 billion expected. Google Cloud revenue jumped 103% to $30.7 billion and operating income more than tripled to $11.1 billion. Investors also weighed Alphabet's heavy AI infrastructure spending and negative free cash flow. Advertising revenue grew at its slowest pace in five quarters, even though search query growth hit its fastest rate in five years, and CEO Sundar Pichai said searches through AI Mode were generating revenue more slowly than traditional searches.
- Alphabet's Price-to-Fundamentals Mismatch Just Got Better as Institutions Sour on Capex
Alphabet reported Q3 2026 capex of $51.36B, kept its 2026 spending plan unchanged and signaled a larger 2027, and several institutions reduced their holdings after the report. Google Cloud revenue reached $30.71B, up 103% YoY, with segment operating income of $11.12B versus $3.59B a year earlier. Total revenue hit $127.58B, up 24.6%, while GAAP EPS of $2.12 fell short of the $2.97 consensus, with an $8.70B loss on equity securities reducing EPS by $0.55. Free cash flow was -$9.07B as capex rose 114.4%, and the company issued $28.7B of senior notes and sold shares through its ATM program. The author argues cloud profits are growing faster than the spending behind them and plans to track ATM issuance each quarter.
- Alphabet Failed Wall Street’s New AI Test. Amazon Takes It Tonight.
Alphabet shares fell about 10% in premarket trading after its third-quarter results missed EPS consensus by 28.52% and ended a 12-quarter beat streak, even though Google Cloud grew 103%. Capex reached $51.36 billion, free cash flow was negative $9.07 billion, and management signaled a significant increase in 2027 spending. The article contrasts this with Oracle, which rose 11% after targeting more than $30 billion in annual free cash flow by FY2029. Amazon reports tonight with AWS revenue up 37% last quarter to $42.23 billion, a 39.4% operating margin, and a raised 2026 cash capex outlook of about $220 billion from $200 billion. The author is watching whether AWS holds near 37% growth and whether Andy Jassy gives a free cash flow recovery timeline, since he cited servers breaking even in a little less than three years but gave no date for free cash flow.
- Alphabet earnings miss reflects first real sign that AI is taking a bite out of search
Alphabet's search and other segment revenue rose 12% year over year to about $63 billion, falling short of estimates for a second straight quarter, even though Google said search query growth was its strongest in five years. The gap between usage and revenue is becoming harder to dismiss as people turn to AI bots and agents, including Google's own tools. Free cash flow was negative $9 billion for the quarter, three times the estimated deficit, and the stock fell about 10% in extended trading. Cloud revenue more than doubled to nearly $31 billion with backlog around $560 billion, while search revenue growth slowed from 19% in the first quarter to 17% in the second and 12% in the third. UBS and Mizuho analysts said the results revive fears that AI is cannibalizing Search and YouTube.
Related markets
Latest news
- Third-quarter U.S. GDP increases a better-than-expected 3.4% as September inflation accelerates
The Commerce Department reported that U.S. GDP grew at a seasonally adjusted annualized pace of 3.4% in the third quarter, above the 3.1% estimate and well up from 2.2% in the second quarter. Consumer spending rose 0.5%, slightly below the forecast of 0.6%, while personal income increased 0.2% against a forecast of 0.3%. The same day, the personal consumption expenditures (PCE) price index rose 0.5% in September from the prior month, lifting annual inflation to 3.6%; the monthly rate matched the Dow Jones consensus, while the annual rate was 0.1 percentage point below consensus. Core PCE, which excludes food and energy, rose 0.3% monthly and 3.1% annually, in line with consensus. A day earlier, the Fed held its benchmark rate in a 3.75%-4% range, and Chairman Kevin Warsh said officials want to assess incoming data before deciding their next move.
- Minister of Agriculture and Environment: No abuse of land recovery
Minister of Agriculture and Environment Trịnh Việt Hùng said land recovery under the draft amended Land Law must be strictly controlled, not abused, and not hinder project implementation. The draft shifts from compensating recovered assets to rebuilding people's lives, and requires each land plot to have a unique nationwide identifier. Land price tables and price adjustment coefficients issued by provincial People's Councils will apply from 1/1/2028, and the government proposes continuing the pilot for transferring land-use rights for commercial housing under Resolution 171/2024/QH15 rather than codifying it now. Nationwide there are about 105 million land plots, over 70 million with data and nearly 44 million connected, and the government has assigned the ministry to complete the land database in 2026.
- Microsoft seeks at least $25 billion in first bond sale since 2017
Microsoft is seeking at least $25 billion through a U.S. bond offering of 10 tranches with maturities from two to 40 years, returning to the investment-grade market for the first time in more than nine years. Its last high-grade issuance, in 2017, raised $17 billion, and proceeds will fund general corporate purposes such as capital expenditures, working capital, share repurchases, acquisitions and debt repayment. The sale follows a fiscal first-quarter earnings report showing strong cloud growth, as major technology companies increase spending on AI infrastructure. Initial price guidance ranges from 50 to 55 basis points over Treasuries for the two-year notes to 130 to 135 basis points for the 40-year bonds due 2066.
- One Magnificent Seven Stock Could Deliver Outsized Returns. Here's the Math
The 24/7 Wall St. model sets a 12-month price target of $421.17 for Alphabet (GOOG), implying 34.05% upside from a $314.19 baseline, with a 70% confidence score. Cloud revenue rose 82% to $24.8 billion in the second quarter, backlog reached $514 billion, and cloud operating margin widened from 20.7% to 35.6% over a year. Against that, capex doubled to $44.92 billion, pushing free cash flow to -$5.86 billion, long-term debt rose from $46.5 billion to $98.2 billion, buybacks were suspended, and a $40 billion at-the-market program raises dilution risk. Shares fell 6.58% over the past week and trade at about 13 times trailing earnings, between a 52-week low of $266.47 and a high of $403.96. The bull case reaches $442.49 and the bear case $366.77, which still implies a 16.73% gain.
- Morning Minute: Hedge Funds Left the BTC ETF Trade and Sovereign Wealth Stepped In
Decrypt's Morning Minute examines why hedge funds exited the bitcoin ETF trade while sovereign wealth funds and wealth managers bought. Citing SEC filings, the newsletter says nine hedge funds and banks, including Millennium, Brevan Howard and Goldman Sachs, sold about 68,000 bitcoin worth of ETF shares from the October 2025 high through June, roughly $5.4 billion at current prices. The main driver was shrinking returns on the ETF-futures trade: its annualized spread fell from 7.9% before the high to 4.8% by late October, and Galaxy's Alex Thorn estimates only about 1.5 points remain over T-bills after fees and financing. Morgan Stanley's wealth management arm, Mubadala and the Abu Dhabi Investment Council bought, while investors too small to file cut holdings by just 6.6% as the price fell 49%. Funds have since added about 87,000 bitcoin, and October ETF flows were nearly flat by Tuesday, with $724 million arriving in the last eight sessions.
- Unlimit founder backs Phase blockchain with $45M as mainnet launches
Phase, a new blockchain, lets smartphone users earn PHASE tokens by validating transactions and sharing internet connections with AI agents through its Phase Proxy service, which launched alongside the chain. Unlimit founder Kirill Eves has committed $45 million, covering the first two years of development with another two years of runway, and the company says it has no outside investors. Eves argues that websites often block automated traffic from data centers, so agents need connections from consumer devices, and current flagship smartphones can deliver approximately 35–45 TOPS of AI processing. Phase plans AI computing and multi-model routing services in November, and part of their revenue will buy PHASE on the open market to reward node operators.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.