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.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
GOOGLearningsAI investmentcloud 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 Cloud Revenue Just Grew 103%, so Why Is the Stock Falling?
Alphabet reported third-quarter results after the market close on Wednesday. Revenue rose 25% to $127.6 billion, below analyst estimates of $127.9 billion, while diluted EPS of $2.12 fell 26% against expectations of $3.01. Operating income climbed 30% to $40.6 billion. Google Cloud revenue soared 103% to $30.7 billion, with an operating margin of 36.2%, and CEO Sundar Pichai cited huge demand for AI infrastructure. The EPS decline mainly reflected an $8.2 billion loss on equity investments, including SpaceX, compared with gains of nearly $12.8 billion a year earlier. Alphabet expects capex of about $200 billion in 2026 and $300 billion in 2027, leaving free cash flow at -$9.1 billion, and the stock fell as much as 11% after hours.
- Alphabet shares tumble 7% as earnings miss overshadows cloud boom
Alphabet (NASDAQ: GOOG) shares fell 7% on Wednesday after third-quarter EPS of $2.12 missed the analyst consensus of $3.02 by $0.90. Revenue rose 25% to $127.6 billion, narrowly beating estimates of $127.22 billion, while Google Cloud revenue surged 103% to $30.7 billion and its operating income climbed from $3.6 billion to $11.1 billion. Consolidated operating income rose 30% to $40.6 billion, but an $8.7 billion net loss on equity securities reduced net income by $6.7 billion, or $0.55 per diluted share after tax. Capital expenditures were $51.4 billion in the quarter, up from $24.0 billion a year earlier, bringing year-to-date spending to $132.0 billion, and free cash flow turned negative at $9.1 billion. The article says investors are looking for clearer evidence that heavy AI infrastructure spending can generate sustainable cash flow and profit growth.
- Alphabet Stock Falls 8% Even as Cloud Sales Double: Is AI Spending the Problem?
- Alphabet Is Only Up 3% This Year: Will Today's Earnings Report Make or Break GOOGL Stock?
Alphabet is up 3% year to date at $324.33 ahead of its Q3 2026 earnings, trailing Microsoft (up 10%) and Meta (down 7%). The stock has slipped as investors weigh heavy AI spending: Q2 capital expenditures reached $44.92 billion, free cash flow turned negative at $5.86 billion, and long-term debt rose from $46.5 billion to $98.2 billion while buybacks were suspended. Q2 Google Search revenue grew 17% and Google Cloud jumped 82% to $24.77 billion, but investors want proof that spending converts into revenue, and rival AI assistants such as Meta's new Muse agent could erode search. Alphabet stock rose 10% after Q1 and fell 7% after Q2, even though both 2026 reports beat estimates.
- Wall Street May Be Underestimating This Magnificent Seven Stock
Alphabet trades 21.2% below its 52-week high, while Google Cloud grew 82% last quarter. Q2 revenue reached 119.80 billion USD, beating the 116.91 billion USD estimate, and cloud backlog hit 514 billion USD. Offsetting that, 2026 capex guidance was raised to 195–205 billion USD, Q2 free cash flow was -5.86 billion USD, and long-term debt rose from 46.5 billion to 98.2 billion USD. 24/7 Wall St. sets a price target of 421.17 USD, 32.4% above the 318.15 USD share price, and rates the stock a buy with 70% confidence.
- Alphabet set to report third-quarter earnings after the bell
Alphabet will report third-quarter results after the bell on Wednesday, with analysts expecting EPS of $3.02 and revenue of $128.2 billion, up 25% from a year earlier. Shares have fallen in five of the past six sessions and are down about 7% in October amid concern about AI spending costs. Capex guidance was raised in July to between $195 billion and $205 billion, and analysts expect third-quarter capex of $55.2 billion, up 130%, along with negative free cash flow of $2.27 billion. Cloud revenue is projected to grow 90% to $28.7 billion as Google takes share from AWS and Microsoft Azure, though analysts flag execution risk in Search as competition from OpenAI, Anthropic and AI agents increases.
Related markets
Latest news
- Marvell Wants Lumentum. Here’s Why Coherent Could Win.
Bloomberg reported on October 28 that Marvell is in advanced discussions to acquire Lumentum, though no definitive agreement has been announced. Lumentum shares rose sharply on the news while Marvell fell in after-hours trading, and Coherent gained about 3.5% after hours. Per Bloomberg’s October 9 report, Lumentum’s optical capacity is effectively sold out through early 2029, and CEO Michael Hurlston said the company could not meet about 70% of expected demand for certain products through 2027. The article argues that a Marvell–Lumentum deal could make Coherent’s independent manufacturing more valuable, especially since Nvidia has invested $2 billion in Coherent.
- 2 Millionaire-Maker Custom Silicon Stocks Powering the AI Infrastructure Supercycle
The article profiles Broadcom and Taiwan Semiconductor Manufacturing (TSMC) as leading custom-silicon players. Broadcom, which partners with Alphabet on TPUs and counts Meta, OpenAI, and Anthropic among its ASIC customers, reported third-quarter AI semiconductor revenue up 221% to $16.7 billion and net income up roughly 216% to $13.1 billion. It expects fourth-quarter AI revenue to rise 236% to $21.7 billion, and the stock trades at about 28 times expected earnings this year. TSMC manufactures chips designed by its customers and, according to many estimates, controls over 90% of the high-end AI chip market. Its stock has delivered a total return of roughly 4,720% over 15 years. The author notes that both stocks' valuations have been volatile amid AI bubble concerns, while their market positions remain strong.
- Bel Fuse (BELFA) Stock Sees Modest Fair Value Lift As Analysts Rework Targets
Bel Fuse's estimated fair value has moved from US$313 to US$326, in line with recent Street targets of US$326 to US$335. Northland raised its target to US$326, calling it another strong quarter with a better-than-expected Q3 sales outlook. JPMorgan kept an Overweight rating but cut its target twice, most recently from US$380 to US$330 in October 2026, a more cautious stance on how current risks and execution uncertainties may cap valuation. Model assumptions were also updated: revenue growth from 11.53% to 11.94%, net profit margin from 20.57% to 20.35%, future P/E from 33.59x to 34.87x, and discount rate from 8.82% to 8.70%.
- 3 Founder Led Stocks With At Least 22% Earnings Growth
The article looks at three founder-led businesses as AI spending draws scrutiny after Alphabet reported negative free cash flow of US$9.07 billion and raised its AI infrastructure capex guidance. Sansan, a Japanese SaaS group founded by Chika Terada, generates about ¥48.9 billion from its Sansan and Bill One segment, with a market value near ¥273.9 billion. Spotify Technology, where Daniel Ek still shapes the long-term vision, earns about €18.8 billion in revenue, mostly from Premium subscriptions, and is valued near US$114.2 billion. China Medical System Holdings, controlled by Treasure Sea Limited, generates about CN¥7.3 billion from its Integrated Business and is valued near HK$24 billion. The article argues founder leadership may encourage more careful capital protection and highlights capital allocation and AI strategy as key questions for these companies.
- October 29: What to Read Before the Stock Market Opens
A roundup of domestic and international financial news from the past 24 hours. In Vietnam, Digiworld (DGW) reported third-quarter profit up 66% to VND 276 billion, though its shares still fell to the floor price, while Thế Giới Di Động (MWG) posted third-quarter net profit up 75% to nearly VND 3.1 trillion, and VIB reached nearly VND 7,600 billion in nine-month pre-tax profit, up 8%. Pi Group's PDCC repurchased VND 900 billion of bonds before maturity, spending nearly VND 996.3 billion. Globally, Beijing is urgently seeking to support its weakening stock market amid an AI sell-off, while the US pending home sales index fell 7.3% to 66.0 points in September 2026, its lowest since 2001.
- Interest Rates on October 29 at Agribank, Vietcombank, BIDV, VietinBank, MB, VPBank, Techcombank, Sacombank, HDBank,...
A survey of online deposit rates at 35 banks on October 29, 2026 shows wide gaps between banks and across terms. For the 18-month term, VPBank leads at 7.4% per year, while five banks (MBV, PGBank, Sacombank, VCBNeo and VIB) each list 7% per year for 12 months. SCB has the lowest 12-month rate at 0.6% per year, 6.4 percentage points below the top. For 6 months, PGBank is highest at 6.9% per year, while 4.75% per year is the common 3-month rate, with SCB at only 0.1% per year.
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.