Alphabet (Google) (GOOGL) Reports $127.58 Billion Q3, First Double Miss in Four Years

Alphabet's First Double Miss in Four Years

Alphabet (Google) (GOOGL) reported third-quarter revenue of $127.58 billion on 2026-10-29, up 25% from a year earlier, and the shares still fell about 10% in after-hours trading because the quarter came in short on both the top and bottom lines. The consensus compiled by LSEG called for $128.22 billion in sales and adjusted earnings of $3.02 per share; the company delivered $2.67. That made it the first quarter in almost four years with a simultaneous revenue and earnings miss. Net income dropped to $26.17 billion, or $2.12 per share, from $34.98 billion, or $2.87, a year ago. Operating income of $40.58 billion trailed the $43.19 billion forecast compiled by FactSet. The figure that drew the sharpest reaction was cash: free cash flow came in at negative $9.07 billion, against a projected deficit of about $2.70 billion. The company's earnings release puts capital expenditures at $51.36 billion, below the $55.09 billion forecast, yet the full-year budget stays at $195 billion to $205 billion, a range raised from $190 billion in the second quarter. Finance chief Anat Ashkenazi told analysts, “We continue to expect our capex to increase significantly in 2027, and will provide further details on our Q4 call,” with spending set to pass $300 billion by 2027. The AI business itself is finding buyers. Google Cloud revenue more than doubled to $30.7 billion, beating the $28.7 billion estimate on 103% growth, and cloud chief Thomas Kurian, on his first earnings call, described demand from AI labs, financial institutions and enterprises as extraordinary. The Gemini app now counts one billion users, which the company calls its fastest-growing product ever. Search was the softer side: revenue rose 12% to $63.35 billion, under the $64.96 billion estimate, even as CEO Sundar Pichai said query growth is running at its strongest pace in five years and pointed to a “half-trillion dollar revenue run rate.”

Buybacks Halt as Debt Climbs to $125.1 Billion

The earnings damage came largely from outside operations. Alphabet booked an $8.66 billion loss on equity holdings, a category that had generated a $99.03 billion gain in the second quarter, and the footnotes attribute most of the swing to unrealized losses on its SpaceX stake, which has been weak since the company's June listing. That single line reduced net income by $6.7 billion, or $0.55 per share. Cash flow turned negative for a second straight quarter, following a $5.86 billion deficit in Q2. Management framed part of the shortfall as timing rather than burning: Alphabet builds TPU inventory before revenue from signed contracts is recognized, and it also paid the $5.2 billion European Union fine from 2018 during the quarter. The financing choices cut shareholders more directly. Buybacks were zero this quarter after $11.5 billion a year earlier. Instead, the company raised $12.4 billion net through at-the-market share sales, which dilute existing holders, plus another $28.7 billion net from unsecured bond issuance. Long-term debt rose to $125.1 billion from $46.5 billion at the end of last year. Cash and securities stand at $265.1 billion, but purchase commitments reach $924 billion, with a further $152 billion in leases and other obligations not yet commenced. Cloud profitability does support the AI case: Google Cloud operating income reached $11.1 billion, up from $3.6 billion a year ago, on a 36.2% margin, and the contracted backlog stands at $561 billion, with about 55% expected to convert to revenue within 24 months. Search, by contrast, decelerated from 17% growth in Q2 to 12%, and YouTube advertising slowed from 13% to 9%. Business chief Philipp Schindler cited currency headwinds, the EU's removal of the de minimis exemption and the World Cup comparison, while conceding that AI Mode queries currently monetize at lower rates.

Price Sits 2% Above Key Support

The stock trades at $294.38, down 9.36% over the past 24 hours, inside a range of $288.22 to $328.04, and COINOTAG's composite scoring puts the strongest support at $289.92, rated 72 out of 100, less than 2% below the last price, so trading since the report has pressed on that level rather than holding clear of it; the top resistance, $326.65, is scored 69 out of 100. Momentum readings back the daily downtrend, with an RSI of 22.2 and a bearish MACD signal. In stock perpetual contracts, open interest stands at $226.1 million with a funding rate of 0.0579% per interval, a mix that keeps the bias pointed lower while the market waits for the Q4 capex details Ashkenazi promised.