Key Highlights

● Alphabet's Class C shares closed the regular session at $321.89.

● After the bell, Alphabet missed on revenue and earnings.

● It marked Alphabet's first dual miss in nearly four years.

● Google Cloud revenue beat forecasts even as the headline numbers missed.

Alphabet shares rose during Wednesday's regular session, October 28, then slid sharply after the bell when the Google parent missed earnings estimates.

Alphabet (NASDAQ:GOOGL) had a day of two halves on Wednesday. The Google parent's shares gained during the regular session, helping lift the Nasdaq-100 in the hours before its third-quarter report. Then, after the closing bell, the stock slid sharply once results showed a rare miss on both revenue and earnings.

Gains Before the Report

Alphabet's Class C shares rose during the regular session to close at $321.89. The gain came on a broadly positive day for big technology names, with the Nasdaq-100 rising 161.72 points to 29,813.16, outpacing the S&P 500.

Investors had reason for optimism heading into the report. The AI infrastructure trade was in full swing, with chip stocks rallying for a fourth straight day after strong results from SK hynix (NASDAQ:SKHY), and Oracle (NYSE:ORCL) jumping after setting a fiscal 2030 revenue target of at least $225 billion.

The Post-Close Reversal

That optimism faded quickly after the bell. Alphabet reported earnings of $2.12 a share, well short of consensus estimates, which sources put at either $2.99 or $3.03. Revenue of $127.6 billion fell just short of the roughly $127.9 billion analysts expected; it was the company's first miss on both lines in nearly four years, according to one recap.

Search revenue came in at $63.35 billion, below the $64.85 billion expected, and YouTube ad revenue of $11.21 billion trailed the $11.43 billion forecast. Net income fell to $26.17 billion from $34.90 billion a year earlier. There were bright spots: Google Cloud revenue reached $30.71 billion, beating the $29.1 billion forecast, and the Gemini app reached 1 billion users.

Spending in Focus

Spending drew close attention. Alphabet's quarterly capital expenditures of $51.36 billion came in below the $55.78 billion expected, but free cash flow turned negative, at roughly minus $9 billion. The company raised its 2026 capital spending forecast to between $195 billion and $205 billion.

Reports differed on the size of the after-hours decline, but all described a steep drop. Nasdaq-100 futures dipped overnight, and Nvidia (NASDAQ:NVDA) and Micron (NASDAQ:MU) slipped in sympathy. The contrast with Microsoft (NASDAQ:MSFT) was stark: Microsoft rose after the bell after beating estimates, as its Azure cloud business accelerated.

What to Watch

The macro backdrop featured the Federal Reserve leaving its benchmark rate range unchanged in a 10-2 vote, and long-dated Treasury yields climbing. The S&P 500 closed up 21.38 points at 7,743.98, and the Nasdaq Composite rose 72.04 points to 26,549.85.

The first test comes at Thursday's open, when the after-hours slide meets regular-session liquidity. Amazon (NASDAQ:AMZN) reports after the close, and Apple (NASDAQ:AAPL) and Meta (NASDAQ:META) report later this week.