Alphabet shares fell approximately 13% in trading on October 29, 2026, following the Google parent’s third-quarter results. At the stock’s intraday low, the company had lost about $524 billion in market value.

Key Takeaways

  • Search advertising revenue growth slowed from the previous quarter and fell short of analyst expectations.
  • Capital spending exceeded operating cash flow, leaving Alphabet with negative free cash flow for the quarter.
  • Google Cloud revenue more than doubled, while Alphabet maintained its 2026 capital expenditure forecast.

Alphabet shares drop during trading

The decline put Alphabet on course for its worst trading session since its 2004 public listing. The figures describe the intraday move, not a closing price or final market-value loss.

The results combined rapid cloud growth with slower search advertising growth and a sharp deterioration in free cash flow. The timing alone does not establish what caused the share-price decline.

Search growth slows as cloud revenue doubles

Third-quarter revenue rose 25% from a year earlier to $127.6 billion. Google Search and other advertising revenue increased 12% to approximately $63.35 billion, below the roughly $65 billion analysts had expected. The growth rate slowed from 17% in the preceding quarter.

Google Cloud revenue rose 103% to $30.7 billion, helped by demand for AI infrastructure and enterprise AI solutions. Google Cloud’s TPU documentation describes the custom chips used to accelerate AI and machine-learning workloads.

Alphabet said annual growth in search queries reached its highest rate in five years, while the Gemini app surpassed one billion users. Those adoption figures sit alongside the slower growth in search advertising revenue.

Capital spending exceeds operating cash flow

Alphabet generated $42.3 billion in operating cash flow during the quarter and spent approximately $51.4 billion on capital expenditure, primarily for technical infrastructure. Free cash flow was negative $9.1 billion, compared with positive $24.5 billion in the same quarter a year earlier.

The company maintained its 2026 capital expenditure forecast of $195 billion to $205 billion and indicated that spending would rise significantly again in 2027. Those figures are management guidance, not completed spending.

Diluted earnings were $2.12 per share, partly affected by an approximately $8.7 billion loss on equity securities, primarily associated with the valuation of Alphabet’s SpaceX investment. That loss affected reported earnings separately from the cash-flow shortfall.

Next milestone

Amazon’s results were scheduled for release after the October 29 market close.

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