Alphabet (GOOG, GOOGL) fell more than 10% on Oct. 29, the day after its third-quarter report, as decelerating search revenue growth and heavy AI spending weighed on the stock. Capital spending on data centers and equipment topped $51 billion in the quarter, pushing free cash flow to negative $9 billion. Search now accounts for less than half of total revenue, down from 55% a year earlier, while revenue outside Search grew 40% to $64 billion. Google Cloud revenue more than doubled, its operating margin rose to 36% from 24%, and its backlog reached $561 billion, while management expects capital spending to rise “significantly” in 2027. At just under 19 times 2027 earnings estimates, the stock trades in line with the S&P 500's average forward earnings multiple, and the author views it as an opportunity in one of the most dominant companies at an average valuation.
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GOOGLartificial intelligenceearningscloud computingvaluation
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Related tickers and likely impact
GOOGL
▲ Likely positiveAlphabet Inc. (Class A)
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $3.5T |
| Close on 10/30/2026 | 279.76 |
| Change that session | -1.43% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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