Google Cloud Doubles but Services Miss Sends Alphabet Down 11%
GOOG is trading near its 52-week low of $268.43 (5.1% above the low) on elevated volume (2.3× avg).
Summary
Alphabet's Q3 was a split decision: Google Cloud more than doubled revenue and booked $11.1 billion in operating profit versus the $9.8 billion analysts expected, but Google Services operating income came in at $39.2 billion against a $40.8 billion consensus. Earnings of $2.12 a share fell well short of the $3.02 estimate and revenue of $127.6 billion missed the $128 billion call. The stock dropped 11% to $288.50 in premarket trading, which would put shares back in the red for 2026. The cash story is the real pressure point: negative free cash flow of $9.1 billion for a second straight quarter, $51.4 billion of capex in Q3, roughly $200 billion expected for the full year, and CFO Anat Ashkenazi saying 2027 spending will increase significantly. Alphabet has now gone three straight quarters without buybacks for the first time since 2015 while funding the buildout with $85.2 billion of debt, $42.9 billion of share sales and $19 billion of mandatory convertible preferred so far in 2026. Management flagged FX and lower monetization on AI Mode searches as drags on search growth, and the Anthropic IPO prospectus published Monday puts counterparty concentration in focus — Anthropic has a $114.5 billion Google Cloud agreement through 2033 plus a TPU deal worth $125-150 billion from 2028-2031. Ashkenazi said TPU inventory buildup weighed on Q3 cash flow but expects a meaningful revenue ramp in 2027.
At the time of this announcement, GOOG was trading at $282.06 on NASDAQ in the Technology sector, with a market capitalization of approximately $3.5T. The 52-week trading range was $268.43 to $404.47. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.