Alphabet shares fell 10% in premarket trading on October 29, 2026, while Microsoft rose nearly 4% after the technology companies reported their September-quarter results. Investors were focused on spending and free cash flow, although the price moves do not establish a single cause.

Key Takeaways

  • Alphabet reported negative free cash flow of $9.07 billion, compared with analysts’ expectation of negative $2.70 billion.
  • Microsoft’s capital expenditures and finance leases totaled $45.2 billion, below analyst projections of $50.67 billion.

Alphabet shares face a post-earnings decline

If Alphabet closes more than 9.77% lower on Thursday, the drop would be its largest post-earnings decline since its 2004 initial public offering. The premarket move was not a closing price.

Alphabet maintained its full-year 2026 capital expenditure guidance of $195 billion to $205 billion. That range is a forecast, not completed spending. Nasdaq-100 futures were down more than 1% early Thursday.

Cash flow and search advertising

Alphabet’s search advertising revenue grew 12% year over year to $63.35 billion in the September quarter, but missed analyst expectations. Chief Business Officer Philipp Schindler said lower monetization in AI Mode partly affected the search business.

Schindler said Alphabet was scaling ads in AI Overviews and AI Mode, including internationally. Google’s AI Mode advertising expansion covers 10 additional countries, including Australia, Canada and India.

Microsoft spending and cash flow

Microsoft’s capital expenditures and finance leases rose 30% from a year earlier in the September quarter. Its free cash flow fell 27% to $18.63 billion but remained positive.

Microsoft’s results covered the first quarter of its fiscal 2027, while Alphabet reported its third quarter of 2026. Both periods ended in September.

Next milestone

Thursday’s regular-session close will establish the size of Alphabet’s post-earnings move.

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