Alphabet's stock fell sharply after its third-quarter results, as search revenue of $63.4 billion came in below analysts' consensus estimate of $64.5 billion. Free cash flow was negative at $9.1 billion, of which $5.2 billion stemmed from a one-time cash payment for a European Commission fine. Google Cloud revenue rose 103% to $30.7 billion and the company reported a $561 billion backlog, while Alphabet plans capex of up to $205 billion this year, mostly for AI. The author argues the cash flow decline reflects surging AI spending rather than long-term profitability, and that investors should keep watching both spending and Google Cloud sales. With a trailing P/E of 14.7 versus a tech sector average of about 24, the author notes the stock's valuation is well below the sector average.
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Related tickers and likely impact
GOOGL
▼ Likely negativeAlphabet Inc. (Class A)
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $3.5T |
| Close on 11/03/2026 | 279.91 |
| Change that session | +0.33% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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