Alphabet Shares Plunge Over 10% After Q3 Revenue Miss, Free Cash Flow Gap Widens to $9.07 Billion

Alphabet (GOOGL) shares fell more than 10% in after-hours trading on October 28 after the Google parent reported third-quarter revenue and profit below market estimates, as weak advertising offset strong cloud growth and AI spending pushed free cash flow negative for a second straight quarter. Q3 revenue totaled $127.6 billion, short of the $128.2 billion expected, while net income attributable to common shareholders fell 25% year-over-year to $26.17 billion. Adjusted earnings per share came in at $2.67, missing the $3.02 consensus. Advertising revenue of $82.01 billion lagged estimates by roughly $1.41 billion. Google Cloud was the bright spot, with revenue more than doubling year-over-year to $30.71 billion and beating expectations. The free cash flow deficit widened to $9.07 billion from negative $5.9 billion in the prior quarter, missing near-breakeven forecasts. CFO Anat Ashkenazi said 2026 capital expenditure guidance is unchanged but spending will rise significantly in 2027.