Alphabet shares fell 10% after missing Wall Street expectations
Alphabet shares fell about 10% in premarket trading Thursday after the company missed third-quarter revenue and profit estimates, with a potential market-value loss exceeding $400 billion. Google Chief Business Officer Philipp Schindler said strong AI Mode query growth came with lower monetization. Reuters attributed negative free cash flow of $9.07 billion to spending on cloud capacity and AI research.
More context
Alphabet shares fell about 10% in premarket trading Thursday after the Google parent missed Wall Street’s third-quarter revenue and profit expectations. CNBC said a close more than 9.77% lower would mark the stock’s worst post-earnings decline ever. Business Insider estimated the drop could erase more than $400 billion in market value, based on Alphabet’s $3.95 trillion valuation on Wednesday.
Revenue rose 25% to $127.6 billion, below analysts’ estimates. Search revenue missed expectations; a CNBC report put it at $63.35 billion, up 12% year over year. Free cash flow was negative $9.07 billion, compared with a $5.9 billion cash burn in the prior quarter. Alphabet attributed the cash outflow to spending on cloud capacity and AI research. Google Cloud revenue doubled year over year to $30.71 billion, while Alphabet projected more than $300 billion in spending in 2027.
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Reporting
- Business Insider — Google is set for a $400 billion stock wipeout after disappointing earnings - Business Insider
- HuffPost (with Reuters) — Alphabet Shares Fall After Revenue Miss, Cash Burn Worsens - HuffPost
- Business Insider — Look out below: Alphabet stock just flashed a dreaded 'death cross' signal - Business Insider
- CNBC — Our next steps for Alphabet stock after earnings disappoint at nearly every turn - CNBC
- Business Insider — 'Burning cash': What Wall Street is saying about Alphabet's dismal 3rd-quarter earnings - Business Insider
- CNBC — Alphabet falls 10% in premarket, putting it on course for its biggest ever post-earnings drop - CNBC
- marketwatch.com — Why Alphabet’s stock could see its worst drop in years after the latest results - MarketWatch
Verifier’s note
Business Insider, HuffPost carrying Reuters copy, MarketWatch, and CNBC report Alphabet’s earnings-related selloff and link it to revenue concerns and/or AI spending and cash-burn worries. Axios focuses on Amazon and only mentions Alphabet in passing.