See the full story in the original article.
Read the original on Yahoo Finance ↗
Keywords
GOOGLcloud computingearningsartificial intelligence
Open a keyword to see other news on the same topic.
Related tickers and likely impact
GOOGL
• NeutralAlphabet Inc. (Class A)
Relevance: high
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.0T |
| Close on 10/27/2026 | 320.58 |
| Change that session | +1.19% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Google Earnings Miss As Cloud Computing Booms, Search Growth Slows
- Alphabet shares fall as revenue, profit miss estimates despite Cloud surge
Alphabet shares fell more than 8% after third-quarter revenue and operating income missed analyst estimates, even though Google Cloud revenue more than doubled. Revenue rose 25% to $127.6 billion, short of the $128.22 billion expected, while EPS was $2.12 and net income was $26.5 billion. Google Cloud revenue reached $30.7 billion, above the $29.15 billion estimate, and operating income of $11.1 billion beat the $9.75 billion forecast, with an operating margin of about 36.2%. Search and other revenue of $63.4 billion fell short of the $64.99 billion estimate, and total operating income of $40.6 billion trailed the $43.23 billion forecast; free cash flow was negative $9.1 billion. Capital expenditure of $51.4 billion came in below the $55.2 billion analysts expected, while CEO Sundar Pichai said demand for AI infrastructure and TPU systems remains strong and the Gemini app has reached one billion users.
- Alphabet Stock Falls 8% Even as Cloud Sales Double: Is AI Spending the Problem?
- Google to report Q3 results as investors focus on AI growth, weigh Meta Muse AI risk
Google (GOOG, GOOGL) reports third-quarter earnings after the bell on Wednesday, with investors focused on whether hyperscalers' AI spending will pay off. Analysts expect EPS of $3.01 on revenue of $127.8 billion, including advertising sales of $83.5 billion and cloud revenue up 91% to $28.9 billion. BofA and TD Cowen see TPU sales as a possible driver, and TD Cowen expects $9.4 billion in TPU sales in the second half of 2026, rising to $62.5 billion in 2027 and 138 billion in 2028. Oracle will be the first company to buy Google's AI processors for its own data centers. Meanwhile, Meta's Muse AI agent, which CEO Mark Zuckerberg says 10 million people have set up, could prove to be a long-term threat to Google's search business.
- Can Strong Search and Cloud Growth Drive GOOGL's Q3 Earnings?
Alphabet's Q3 2026 results, due October 28, are expected to benefit from momentum in Search and Cloud, according to Zacks. The consensus estimates advertising revenue of $83.523 billion, up 12.6% year over year, Search and other revenue of $65 billion, up 15%, and Google Cloud revenue of $29.16 billion, up 92.3%. Support comes from AI Overviews and AI Mode, which surpassed 1 billion monthly active users in the second quarter, and from AI Max, which has attracted 500,000 advertisers. Alphabet holds 89.94% of the search market per StatCounter, and is the third-largest cloud provider with a 15% share per Synergy Research, behind Amazon's 28% and Microsoft's 20%. The company has beaten the Zacks Consensus Estimate in each of the last four quarters, with an average surprise of 86.65%.
- Alphabet & Microsoft Earnings Preview: AI Cloud Growth Takes Center Stage
Alphabet and Microsoft report quarterly results after the close on Wednesday, October 28, with investors watching whether AI cloud demand justifies heavy infrastructure spending. Zacks expects Alphabet to post Q3 EPS of $2.94, up more than 2%, with revenue excluding traffic acquisition costs rising nearly 28% to $111.8 billion and Google Cloud revenue up 92% to $29.15 billion. Alphabet forecasts annual capital spending of $195-$205 billion. Microsoft is expected to report fiscal first-quarter EPS of $4.71, up 14%, and revenue of $90.58 billion, up more than 16%, with Azure growth guided to 44-45% in constant currency. The article adds that quarterly capital expenditures could exceed $50 billion, and that higher depreciation and AI infrastructure costs could pressure cloud margins.
Related markets
Latest news
- NVDA Stock Edges Down On DOJ Interest In $12.9 Billion Hugging Face Acquisition
Nvidia shares slipped 1% on Wednesday after reports that the U.S. Department of Justice asked how its planned acquisition of Hugging Face could affect AI competition, including whether Nvidia could control a key distribution point for AI models and tools. The questions add to a years-long antitrust probe of Nvidia that began under former President Joe Biden and reportedly covers its acquisitions, investments, sales practices and whether it has pressured customers, with past deals such as SchedMD, Groq's licensing deal and Run.ai also examined. Nvidia announced in early September that it agreed to buy Hugging Face for about $12.93 billion, including roughly $11.9 billion payable to investors and an equity-based retention program of up to about $1 billion for employees. Jensen Huang has pledged that the platform will remain open to models, frameworks, clouds and computing platforms across the industry, and that Nvidia's chips will not be required to use it. The deal is expected to close in the first half of 2027.
- Google slumps amid fears of AI overspending
Alphabet, Google's parent company, saw its shares fall as much as 9% after hours after quarterly sales and profits missed Wall Street estimates, amid worries about AI overspending. Google spent $51.3bn between July and September, up from $44.9bn in the prior quarter, and reported negative free cash flow of $9.1bn, the second negative quarter since it listed more than 20 years ago. Earnings were $2.12 a share against expectations of about $3, weighed down by an $8.7bn loss on its equity investments including a large SpaceX stake, while revenue rose 25% to $127.6bn, slightly below the roughly $128bn analysts forecast. Microsoft, by contrast, rose as much as 6.4% after hours on stronger cloud performance, with revenue up 19% to $92.3bn and Azure sales up 48%. Separately, Anthropic has filed for a New York IPO that could become the world's largest ever, with a target valuation of around $1.5tn to $2tn, and plans to open shares to retail investors in the UK and parts of continental Europe through RetailBook.
- Not Space. Not Starlink. Here's My Top Reason to Buy SpaceX Stock.
The author argues that SpaceX's super intelligence (SI) division, which holds its AI data center platform, was formed from xAI and includes X, is the top reason to invest in the stock, more so than its rocket or Starlink businesses. SI revenue reached $7.56 billion in the third quarter, up about 830% from $813 million a year earlier and roughly three times the $2.56 billion from the second quarter. The division invested $16.4 billion in capital expenditure and posted a small operating profit of $431 million. This was the first report since SpaceX acquired Cursor in August, a deal that added to revenue and came with a $1.2 billion stock-based compensation cost, which the author says will not repeat.
- GOOGL Stock Slumps 11% After-Hours: Alphabet's Surge in AI Spending Pressures Third-Quarter Profits And Cash Flows
GOOGL shares dropped about 11% after hours as third-quarter profit was squeezed by heavy AI infrastructure spending and an $8.7 billion loss on its equity investment portfolio. Consolidated revenue rose 25% to $127.58 billion, while net income available to common stockholders fell to $26.17 billion, or $2.12 per share, below the $2.99 per share Wall Street expected. Google Cloud revenue rose 103% to $30.71 billion and its operating income reached $11.12 billion, which management linked to enterprise AI demand and sales of its TPU hardware. Free cash flow was negative $9.1 billion, the second consecutive negative quarter, and analysts polled by Fiscal.ai expect it to stay negative until the quarter ending September 2027. Alphabet also issued $28.7 billion of senior unsecured debt and raised $12.4 billion through its at-the-market share issuance program.
- Microsoft's Satya Nadella says 24 new data centers built during Q1
Microsoft CEO Satya Nadella said on the company's Q1 earnings call that it built 24 new data centers across five continents as AI demand accelerated. He said the infrastructure is a fungible fleet that lets Microsoft dynamically allocate capacity across compute, data, foundry and Copilot. Time from dock to live for new GB300s in its biggest regions fell by about 20% quarter over quarter. Through optimizations across data center design, silicon, systems, software and models, throughput for Copilot workloads rose more than 50% quarter over quarter.
- Intel to report Q3 earnings as chip stocks continue to rebound
Intel will report its third-quarter earnings after the bell Thursday as chip stocks keep recovering from an AI-driven rout over the past month. Intel shares fell more than 20% over the last month, while Micron and AMD dropped roughly 10% and Nvidia about 3%. SK Hynix reported revenue up 328% to some $78.7 billion and operating profit up 632%, helping ease concerns about the AI trade. Bloomberg analyst consensus expects Intel EPS of $0.40 on revenue of $16.5 billion, versus $0.23 and $13.6 billion a year earlier. Foundry revenue is expected to reach $6.1 billion, a potential 44% year-over-year increase, and The Information reported Google ordered 3 million of its custom Tensor Processing Units from Intel.
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.