Alphabet Stock Plunges Nearly 10% After Q3 Earnings Miss and AI Spending Surge
Shares of Alphabet Inc. (NASDAQ: GOOGL), Google’s parent company, tumbled nearly 10% in after-hours and premarket trading on October 29, 2026. The decline followed third-quarter results that fell short of Wall Street expectations, despite a historic surge in cloud revenue.
Alphabet reported Q3 revenue of $127.58 billion, up 25% year over year but below analyst forecasts of approximately $128.22 billion. Net profit declined 25% year over year, while free cash flow fell to -$906.5 million.
The results came as Alphabet’s capital expenditures reached $51.36 billion—a 114% increase from the same period last year. The spending was driven largely by the company’s aggressive investment in AI infrastructure, including its Gemini AI models and custom Tensor Processing Units (TPUs).
Key Q3 results:
- Total revenue: $127.58 billion, up 25% year over year
- Capital expenditures: $51.36 billion, up 114% year over year
- Free cash flow: -$906.5 million
- Diluted earnings per share: $2.12, below Wall Street’s $3.02 estimate
One bright spot was Google Cloud, where revenue more than doubled, surging 103% to $30.71 billion amid strong AI demand. Operating income tripled.
However, investors focused on slowing Search monetization growth and the scale of Alphabet’s AI spending, overshadowing the cloud business’s strong performance.
Source: Seeking Alpha — Alphabet tumbles as earnings miss overshadows Google Cloud surge