Alphabet’s free cash flow sinks further, Q3 capex expectations miss in worrying sign for AI trade
Google Cloud revenue more than doubled, but analysts said heavy AI infrastructure spending pushed free cash flow to a record $9.07 billion loss.
- Ahead of Wednesday's earnings report, Alphabet faces negative free cash flow for the first time, with analysts projecting a $2.27 billion deficit in the third quarter.
- Rising capital spending drives this cash flow pressure; in July, the company lifted full-year guidance to $195–$205 billion, with annual spending expected to exceed $300 billion in 2027.
- Alphabet's cloud division is projected to grow 90% to $28.7 billion, gaining share from Amazon Web Services and Microsoft Azure, while OpenAI and Anthropic intensify pressure on the core Search business.
- Shares of the Google parent have dropped about 7% in October, while analysts at Citizens warned that 'execution risk exists' and they are 'incrementally cautious on Search' amid rising agent competition.
- To maintain dominance, Google is aggressively adding Gemini models to enterprise offerings and ramping sales of custom TPUs as agents redefine the search landscape and competition intensifies.
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Reformatorisch Dagblad
dagelijksestandaard.nlGoogle parent company Alphabet achieved higher revenue in the third quarter but saw profit decline. Revenue from the cloud division increased the fastest, driven by strong demand for computing power and artificial intelligence applications. The net result took a hit due to investment losses by Google.
Alphabet's action fell by 9% after reporting its results in the third quarter.
Alphabet’s heavy cloud spending drives bigger-than-expected cash burn
Oct 28 (Reuters) - Alphabet reported a higher cash burn on Wednesday than analysts expected as it spends heavily to boost capacity for its cloud business, sending its shares down more than 6% in extended trading. The company reported negative free ca...
Alphabet achieved record-high revenue of $127.5 billion in the third quarter. Driven by increasing demand for AI, cloud revenue surged 103%, and search advertising also recorded double-digit growth. However, free cash flow showed a deficit due to large-scale capital investments to build AI infrastructure.
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