The article cites three long-term growth drivers for Alphabet: its accelerating Cloud business, expanding AI ecosystem, and resilient subscription operations.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
GOOGLcloud computingartificial intelligence
Open a keyword to see other news on the same topic.
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.
Related news
- Alphabet Stocks Rise 1.85% With Search Monetization Behind Wells Fargo's Target Cut
Alphabet (GOOG) shares rose 1.85% to $285.01 at 9:40 a.m. ET on November 2, after Wells Fargo cut its price target to $365 from $371 while keeping an Overweight rating. Wells Fargo attributes much of the search slowdown to AI Overviews and expects that pressure to last another two quarters. In Alphabet's October 28 results, Search and other revenue was $63.350 billion versus $30.709 billion for Cloud, and Cloud generated $11.121 billion in operating income, a 36.2% operating margin, though its revenue equals just 48.5% of Search's. The article says investors should watch Cloud's operating margin and Search's revenue growth, since holding the first while improving the second would offer stronger evidence that the AI push is boosting earnings.
- 3 Reasons to Buy Alphabet Stock Right Now
Alphabet shares hit an all-time high earlier this year but are down 11% year to date, while the S&P 500 is up 10%, as investors worry about heavy AI spending and a post-earnings dip. Third-quarter revenue rose 25% year over year to $127.6 billion, below analyst estimates, while net EPS fell 26% to $2.12 and free cash flow was negative $9.1 billion versus positive $24.5 billion a year earlier. Google Cloud was a bright spot, with sales of $30.7 billion, up 103%, and a cloud backlog of $561 billion, up 262%, of which 55% (about $309 billion) is expected to be recognized over the next 24 months. The article also points to the Gemini app reaching one billion users and strong demand for Alphabet's custom AI chips, and argues the post-earnings dip is not justified. It notes Alphabet trades at 18x forward earnings versus an average of 17x for communication services stocks.
- 1 Reason Alphabet Stock Is Worth Buying on This Pullback
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.
- The 5 most interesting analyst questions from Alphabet's Q3 earnings call
The market reacted sharply negatively to Alphabet's third-quarter results, even though revenue of $127.6 billion was in line with the S&P analysts' estimate of $127.9 billion. Earnings per share were $2.12 against an expected $3.01, a 29.6% miss. Management credited AI-driven momentum across Search, Cloud and YouTube for the strong top-line growth, and operating margin rose to 31.8% from 30.5% a year earlier, though rising costs for infrastructure and AI investment weighed on profitability. In the Q&A, analysts asked about productivity gains from new AI models, scaling agentic products to a billion users, compute allocation between internal needs and Cloud customers, and how TPU system sales affect cash flow.
- Google lost nearly half a trillion this week. Here's how Mike Khouw is trading it
Alphabet (GOOGL) shares fell over 12% to $285 after its Q3 2026 earnings, wiping out nearly $500 billion in market cap. Cloud revenue rose 103%, but EPS of $2.12 missed the $3.02 estimate and free cash flow turned negative amid heavy AI capital spending. Several firms downgraded the stock or cut price targets, while technical indicators weakened, with the RSI deeply oversold and the MACD showing a sell signal. The author outlines a short strangle strategy expiring December 18, 2026, which would profit if GOOGL stays between $250 and $325, with the main risk being a drop below $250 and an unexpected catalyst pushing shares past $310. The author notes both the short call and short put have a probability of profit close to 90%.
- Is AI cannibalizing Google's search business?
In the Loop host Ejaaz Ahamadeen examines the market reaction to Alphabet's (GOOGL, GOOG) latest earnings, when the stock fell more than 12% in early trading. Search revenue grew 12%, below the roughly 17% expected, and executives attributed the slowdown to AI cannibalizing search, which now accounts for less than 50% of Google's revenue for the first time. Meanwhile, cloud revenue topped $30.7 billion in the quarter, up 103% year on year, and Google reached half a trillion dollars in annual revenue run rate for the first time. The discussion notes that if users shift to AI chatbots for information, this could signal pressure on Google's core advertising model.
Related markets
Latest news
- Why Bristol Gate Canadian Equity Strategy Bought OR Royalties Inc. (OR) After Gold's Pullback
Bristol Gate Capital Partners' Q3 2026 investor letter for its Canadian Equity Strategy said the strategy underperformed the S&P/TSX Composite Total Return Index, which gained 1.6% in the quarter, as market returns concentrated in a few large stocks and rising bond yields weighed on defensive and rate-sensitive sectors. The strategy reallocated capital into OR Royalties (NYSE:OR), a precious-metals royalty company, after gold fell more than 25% from its January peak. The letter cited the company's cash margin of about 97% and minimal debt. As of October 30, 2026, OR shares closed near $31.89, with a market cap of about $5.88 billion, after a one-month return of about -7.13%. Hedge fund holders numbered 29 at the end of Q2, down from 35 in the prior quarter.
- Tom Lee Calls Bottom on AI Stock Selloff, Citing Tight Supply and Crypto Resilience
Fundstrat co-founder Tom Lee told CNBC the AI stock selloff has reached its bottom, arguing demand remains constrained by supply. He pointed to crypto's limited reaction to the Binance hack, initially estimated at about $6.3 billion, as a sign that many sellers have already exited. Despite strong AI demand, Intel shares plunged nearly 30% to $65.76 after a weak fourth-quarter forecast, due to manufacturing constraints and a weaker PC business. Bitcoin fell about 4% to roughly $76,400, and U.S. spot Bitcoin ETFs saw $643.2 million in outflows that day. Binance said about $3 billion of the affected assets had been frozen.
- Why Marvell Technology Plunged Today
Marvell Technology (MRVL) shares fell 10% by 12:54 p.m. EDT after the company agreed to buy optical laser maker Lumentum (LITE) in an all-stock deal valuing it at roughly $115 billion, a 24% premium. Investors worried Marvell may be paying a steep price, since Lumentum's stock had already risen sharply over two years and the purchase price was more than five times its share price a year earlier. The article says Marvell is drawn to Lumentum's indium phosphide laser technology, which could be combined with Marvell's digital signal processors and connectivity for next-generation AI systems as co-packaged optics spread inside server racks. It also notes AI stocks are volatile and have recovered from past selloffs, while investors fear the upcoming midterm elections.
- ServiceNow vs. UiPath: Consistent Revenue Growth vs. Volatile Seasonal Trends
The article compares quarterly revenue for ServiceNow (NOW) and UiPath (PATH) over the last eight quarters, with data as of November 1, 2026. ServiceNow shows consistent quarter-over-quarter sales growth, and its current remaining performance obligations (contract revenue to be recognized within the next 12 months) reached $13.7 billion, up 20.5% year over year. UiPath follows a more typical year-over-year growth pattern, with fiscal Q2 revenue of $410.3 million, up 13% from a year earlier, versus 17% in Q1 and 14% in Q4. It forecasts fiscal Q3 revenue of $440 million to $445 million. Its revenue often spikes near calendar year-end as businesses spend remaining IT budgets, adding to quarterly volatility.
- Bond Market Signals Distress About CoreWeave. Here's How To Profit From It.
As investors debate whether an AI bubble is about to burst, a few weak firms have been hit hard. CoreWeave's stock is one of them.
- This Will be John Ternus's First Earnings Call as CEO
John Ternus, described as the 'product guy,' will host his first earnings call as Apple CEO tonight, and all eyes will be on him.
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.