Key Highlights

● Alphabet earned $2.12 a share, below forecasts near $3.00.

● Revenue of $127.6 billion came in just short of estimates.

● Free cash flow turned negative at about minus $9 billion.

● The company raised 2026 capex guidance to $195B-$205B.

Alphabet shares slid sharply in extended trading after the Google parent missed third-quarter profit and revenue forecasts and reported negative free cash flow.

Alphabet (NASDAQ:GOOGL) sank after the bell on Wednesday, October 28, after the Google parent reported third-quarter results that fell short of Wall Street's expectations on both earnings and revenue. It marked Alphabet's first miss on both the top and bottom lines in nearly four years, according to one market recap. The drop reversed a solid regular session in which Alphabet's Class C shares rose to close at $321.89.

The Numbers

Alphabet earned $2.12 a share, well below analyst forecasts, which sources put at either $2.99 or $3.03. Net income fell to $26.17 billion from $34.90 billion a year earlier, with a loss on equity stakes among the factors weighing on profit, according to reports.

Revenue rose at a double-digit pace to $127.6 billion but came in slightly below the $127.9 billion analysts expected. Search revenue of $63.35 billion missed the $64.85 billion forecast, and YouTube advertising revenue of $11.21 billion fell short of the $11.43 billion estimate. Free cash flow turned negative, at roughly minus $9.06 billion by reported figures, as the company continued to invest heavily in AI infrastructure.

Bright Spots Overshadowed

There were positives. Google Cloud revenue reached $30.71 billion, beating the $29.1 billion analysts expected, and the Gemini app has reached 1 billion users. Quarterly capital expenditure of $51.36 billion actually came in below the $55.78 billion consensus.

But Alphabet also raised its 2026 capital spending forecast to between $195 billion and $205 billion. Combined with negative free cash flow and the earnings miss, investors appeared to focus on the cost of the AI build-out rather than on the cloud strength.

A Sharp Contrast With Microsoft

The after-hours slide weighed on other technology names. Nvidia (NASDAQ:NVDA) and Micron (NASDAQ:MU) dipped in extended trading in sympathy, and Nasdaq-100 futures pointed lower overnight. The reaction stood in sharp contrast to Microsoft (NASDAQ:MSFT), which rose after the bell on a revenue beat and accelerating Azure growth.

Before the results, the S&P 500 rose 21.38 points to 7,743.98, its third straight gain, and the Nasdaq Composite added 72.04 points to 26,549.85. The Federal Reserve left its benchmark rate range unchanged in a 10-2 vote, and long-dated Treasury yields climbed.

What to Watch

Thursday's open will show whether Alphabet's extended-trading slide holds once the regular session begins, and how far it drags on the Nasdaq and the S&P 500, where Alphabet is one of the largest weightings.

Amazon (NASDAQ:AMZN) reports after the close on Thursday, offering another major read on cloud growth and AI spending, while Apple (NASDAQ:AAPL) and Meta (NASDAQ:META) report later this week.