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Alphabet’s free cash flow sinks further, Q3 capex expectations miss in worrying sign for AI trade
Free cash flow fell to minus $9.07 billion as Alphabet lifted 2026 capital spending guidance to $195 billion to $205 billion for AI and cloud build-out.
- Alphabet shares fell 8% in after-hours trading on Wednesday after the company reported third quarter revenue of $127.6 billion, missing the $127.8 billion analyst consensus forecast.
- Earnings per share represented a much bigger miss, coming in at $2.12 versus the $3.01 analyst outlook, though total revenue increased 25% year-over-year, marking 13 consecutive quarters of double-digit growth.
- Google Cloud revenue surged 103% to $30.7 billion, while YouTube ad revenue grew 9% to hit $11.2 billion; Alphabet surpassed 150 million YouTube Music and Premium subscribers globally.
- CEO Sundar Pichai called the July-to-September period a "strong quarter," noting Gemini AI reached 1 billion users, making it "the fastest-growing product in Google's history." Gemini 4 Argon and Carbon models remain at the frontier.
- Along with Big Tech peers Meta, Microsoft, Nvidia and Amazon, Alphabet faces mounting scrutiny from Wall Street as investors demand returns on massive AI infrastructure spending.
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Google's mother Alphabet pumps vast amounts of money into the expansion of data centers. This pushed free cash flow into the negative area for the second time in a row. Investors are increasingly concerned that the technology group could take over.
·Vienna, Austria
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Coverage Details
Total News Sources193
Leaning Left31Leaning Right33Center49Last UpdatedBias Distribution43% Center
Bias Distribution
- 43% of the sources are Center
43% Center
L 28%
C 43%
R 29%
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