Alphabet shares fall as cloud boom masks advertising miss

Alphabet's third quarter split in two: Google Cloud revenue rose 103 percent to 30.7 billion dollars, a record, while total revenue of 127.6 billion dollars came in just below consensus, advertising revenue missed forecasts, earnings per share fell to 2.12 dollars, and free cash flow turned negative at minus 9.1 billion dollars as capital spending reached 51.4 billion in the quarter.

Why it matters: Search advertising is still the profit engine that funds Alphabet's artificial intelligence build-out, so a miss there, alongside capital spending running ahead of operating cash flow, tests whether cloud growth can carry the investment case while the core business softens.

Data as of Update 2026-10-28T17:06:05-04:00: all earnings figures are now Alphabet's own, from Exhibit 99.1 to its 8-K of October 28, 2026 (accession 0001652044-26-000080, filed 16:01 ET), read in full in the live browser in this run: total revenues 127,577 million dollars, Google Cloud revenues 30,709 million, operating income 40,576 million, diluted earnings per share 2.12 dollars, purchases of property and equipment 51,355 million, free cash flow minus 9,065 million. The exhibit states no full year 2026 capital expenditure guidance. Expectations comparisons (consensus revenue of about 127.9 billion dollars, Search and YouTube advertising misses, cloud forecasts of about 29 billion) are investinglive's reporting of the release, read in full in this run. The share move is from Investing.com's headline in the feed pool; the full article was blocked to this run. The 8.7 billion dollar equity securities loss behind the earnings decline is investinglive's attribution, not a figure stated in the exhibit summary read in this run. An earlier publish attempt for this item failed twice on dropped GitHub connections and the item was staged locally until this update. Developing item.

Alphabet’s third quarter results, filed with the Securities and Exchange Commission after the close on Wednesday, delivered a split verdict. Total revenues rose 25 percent to 127.6 billion dollars, and Google Cloud revenues rose 103 percent to 30.7 billion dollars, which the company called record growth, led by enterprise artificial intelligence infrastructure and solutions and by sales of its TPU systems, with Cloud operating income more than tripling to 11.1 billion dollars. Against that, investinglive reported that Search and other revenue of about 63 billion dollars and YouTube advertising of about 11.2 billion both missed expectations, and that total revenue came in just below the roughly 127.9 billion dollars analysts had expected.

The cost of the build-out is now visible in the cash flow statement. Consolidated operating income rose 30 percent to 40.6 billion dollars, a margin of 31.8 percent, but net income available to common stockholders fell to 26.2 billion dollars and diluted earnings per share to 2.12 dollars, from 2.87 dollars a year earlier, a decline investinglive attributed to a loss of about 8.7 billion dollars on equity securities. Purchases of property and equipment reached 51.4 billion dollars in the quarter, ahead of the 42.3 billion the operations generated in cash, leaving free cash flow at minus 9.1 billion dollars. Chief Executive Sundar Pichai said the company is now on a half-trillion dollar revenue run rate. Investing.com reported the shares tumbled 7 percent in reaction to the miss.

Alphabet shares fall as cloud boom masks advertising miss

Sources