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Alphabet’s free cash flow sinks further, Q3 capex expectations miss in worrying sign for AI trade
The company said AI and cloud spending pushed free cash flow to minus $9.07 billion, its first negative quarter as revenue still grew 25%.
- 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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SCIENCE & TECH: Google parent Alphabet tumbles after profit disappoints
Google parent Alphabet on Wednesday missed Wall Street profit and revenue expectations, and AI spending accelerated its cash burn, sending its shares down more than 10% in extended trading. Capital expenditures, driven by AI, will increase significantly in 2027, said Chief Financial Officer Anat Ashkenazi, adding that this year’s capex forecast was unchanged. She said she also expected near-term margin pressure from the use of third-party cloud …
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Total News Sources179
Leaning Left29Leaning Right31Center48Last UpdatedBias Distribution44% Center
Bias Distribution
- 44% of the sources are Center
44% Center
L 27%
C 44%
R 29%
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