Overview
- Alphabet reported third-quarter revenue of $127.6 billion and net income of $26.17 billion, and said Google Cloud revenue rose about 103% to $30.71 billion.
- The company recorded an $8.7 billion loss on equity investments and posted roughly negative $9.1 billion in free cash flow, driven largely by roughly $51.4 billion in quarterly capital spending.
- Investors punished the results, sending Alphabet shares down about 9–10% in after‑hours trading as markets weighed slower Search and YouTube ad growth against heavy AI spending.
- Management said enterprise demand for AI and sales of Google’s TPUs supported Cloud and that Cloud backlog and model usage are rising, but the CFO warned that capital spending will increase materially in 2027.
- The quarter highlights a wider industry split where firms that show near‑term cash generation are being rewarded while those burning cash to build AI infrastructure face investor scrutiny and tighter financing questions.