Alphabet (GOOG) shares plunged more than 11% on Thursday after third-quarter revenue and earnings per share missed expectations, with search revenue rising 12% against a 15% forecast and YouTube advertising reaching $11.2 billion versus $11.4 billion expected. Google Cloud revenue grew 103%, beating expectations of 93%, with operating margins of 36.2% and backlog rising to $561 billion from $510 billion. Bank of America kept its rating but cut its price target to $380 from $430, while UBS lowered its target to $332 from $380 and kept a Neutral rating, questioning whether external TPU sales will lift profitability as cloud margins were flat quarter over quarter. Investors remain concerned about spending, as Alphabet kept its 2026 capital expenditure outlook at $195 billion to $205 billion and recorded negative free cash flow for a second straight quarter, more than $9 billion in the red. Kathleen Brooks of XTB said the main concern for investors is weaker-than-expected advertising and search results.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
GOOGLsearch enginesadvertisingearningscloud 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 Search Revenue Miss Drove Alphabet's Third-Quarter Top-Line Shortfall, BofA Says
- 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 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.
- Google stock gets shredded after earnings—here's 2 reasons why investors hated the quarter
Alphabet (GOOGL) shares fell about 10% in pre-market trading after its third-quarter report, even as Google Cloud grew 103%. Revenue of $127.57 billion and EPS of $2.12 both missed expectations of $128.2 billion and $3.02. Search sales of $63.4 billion came in below the $64.9 billion expected, fueling concerns about competition from Claude and ChatGPT. Free cash flow was negative $9.1 billion versus a negative $3.5 billion estimate, in a market already jittery about negative free cash flow at Big Tech. Pivotal Research CEO Jeffrey Wlodarczak said consumers interact with less advertising when using Google search and AI, while AI users (1 billion) and queries are at a 5-year high.
- GOOGL Tumbles Over 10% Premarket: Analyst Says Investors Underappreciate Alphabet’s AI Strength
Alphabet (GOOGL) shares fell more than 10% in premarket trading on Thursday after its core advertising and search businesses showed weakness and results missed analyst expectations. Morningstar said Alphabet’s AI strength remains intact and raised its fair value estimate to $450 from $433, 38% above the last close and above Wall Street’s average price target of $329.68 according to Koyfin. Google Cloud grew 103% last quarter, and Search & other revenue rose 12% to $63.3 billion, down from 17% growth in Q2, while overall advertising sales rose 10.6% to $82.01 billion. Chief Business Officer Philipp Schindler attributed the slowdown to foreign exchange rates, weaker Asia-Pacific retail advertising after the EU ended its de minimis exemption, and an unusually strong Q2 boosted by the FIFA World Cup, and noted that AI Mode carries fewer ads.
Related markets
Latest news
- Aon CEO warns AI data center insurance risks could threaten financing
Aon CEO Greg Case warned in a CNBC interview that concentrating billions of dollars of AI equipment and computing capacity in a few locations creates concentration risk that could make projects harder to insure and force financing structures to change. He said data center business interruption could be measured in millions of dollars per minute. Aon reported a record data center project pipeline, 7% organic revenue growth in its commercial risk business, and adjusted EPS up 10% to $3.36 in the third quarter. Aon's pending $17 billion acquisition of USI Insurance Services, expected to close in the fourth quarter, is expected to bring $395 million in annual earnings benefits. Case believes the global insurance industry's roughly $4.5 trillion in capital must double or triple to meet growing cyber, AI and data center risks.
- We're raising our price target on Eli Lilly as the obesity-drug boom rolls on
Eli Lilly shares rose over 6% to about $1,370, a record closing high, after third-quarter revenue jumped 39% year over year to $24.4 billion, above the LSEG consensus of $22.6 billion. Adjusted EPS rose 6.6% to $7.48, beating analysts' $6.26 estimate, though a sizable acquisition-related accounting charge held back annual profit growth. Adjusted gross margin reached 84.4%, up from 83.6% a year earlier. Mounjaro revenue climbed 65% to $10.7 billion and Zepbound rose 49% to $5.35 billion, as higher patient volumes more than offset lower realized prices. The price target was raised to $1,500 from $1,300 and the 2 rating was reiterated, with shares up more than 50% since the April 29 close.
- AbbVie Stock: What 10 Years of Growth and Dividends Did for $1,000
AbbVie was spun off from Abbott Laboratories on January 1, 2013, and relied heavily on Humira until the drug lost U.S. exclusivity in early 2023. In Q2 2026, Humira sales fell 35.9% to $756 million, while Skyrizi rose 24.4% to $5.505 billion and Rinvoq rose 24.5% to $2.525 billion. The quarterly dividend grew from $0.57 in 2016 to $1.73, with a forward annual dividend of $6.92 and a yield of roughly 2.30%. A $1,000 investment 10 years ago would be worth $7,464.50 including dividends, a 646.45% total return, versus 263.37% for the S&P 500 on a price-only basis. The article notes the shares closed at $197.99 on April 29, 2026, reached about $291.48 this morning, and trade above the average analyst target of $283.19, while also flagging negative shareholders' equity and a forward P/E of about 18.
- $11 Billion in Bitcoin Options Expire Tomorrow—Here's What It Means
About $11 billion in Bitcoin options, roughly 135,000 BTC and a third of Deribit's Bitcoin options open interest, expire on Friday. Max pain sits at $78,000 against a market price near $81,500, and about 86% of contracts are out of the money. The Fed held rates at 3.75% to 4% on Wednesday in a 10-2 vote, with two dissenters favoring a hike, while the 10-year Treasury yield closed at 5.05%. Of the expiring contracts, roughly 88,700 are calls and 46,500 are puts, a put-to-call ratio of 0.52. Because the $11 billion is notional value, settling at today's price would move about $130 million, roughly 1% of the headline figure. Heaviest call strikes sit at $95,000 and $100,000, with the biggest put cluster at $70,000, and the next expiry on December 25 covers about 135,500 BTC.
- HYPE teases all-time high as NYSE owner ICE eyes US Hyperliquid perps
HYPE, the native token of Hyperliquid, surged about 20% on Thursday after Intercontinental Exchange (ICE) and Trade[XYZ], whose investors include Stanley Druckenmiller, announced plans for US perpetual futures. HYPE traded above $96, close to September's all-time record of $97.96. The companies said they would seek regulatory approval for markets covering crypto, stocks, indexes, commodities and currencies, targeting retail traders through a clearing structure separate from ICE's institutional business. ICE is taking a minority stake in Trade[XYZ], with the investment amount and launch date undisclosed. Distribution is expected through ICE's joint venture with OKX, pending separate approvals, and the regulatory path remains conditional.
- A Bold Bet: The 300-Year-Old City Wagering on China, but What Lies Behind It Is the Real Concern
SAIC Motor, one of China's largest EV makers, chose a port near the northwestern Spanish city of Ferrol in June as the site for a large plant expected to create more than 1,000 jobs for a city hit by industrial decline and population loss. Local residents largely support the project, and the government is expected to approve the investment before the November 29 election; even if that does not happen, a new conservative government is widely expected to approve it. Some critics worry that Chinese firms may keep core technology, leaving Spain as an assembly site or Ferrol as a way to avoid EU tariffs on Chinese imports, as Spain's trade deficit with China has doubled in six years to a record high. Former Spanish ambassador to China Rafael Dezcallar says the project must be tied to technology transfer.
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.