Google Stock Down After Earnings: What Happened to Alphabet

Why Google Stock Is Down Even After Cloud Revenue Doubled

Google Cloud doubled its revenue in Alphabet's Q3 earnings, yet Google stock still fell about 11% the next morning.

Oct 29, 2026

Alphabet's share price fell about 11% after its third-quarter earnings, even though revenue rose 25% to $127.6 billion.
Google Cloud's revenue more than doubled, but Search grew 12%, slower than in the previous quarter.
Alphabet spent $9.1 billion more cash than it brought in during the quarter, mainly on AI infrastructure, and expects that spending to rise significantly next year.

If you own Google stock, Thursday started badly. Alphabet's shares were down about 11% in pre-market trading on October 29.

The drop came a day after Alphabet, Google's parent company, reported its third-quarter earnings. Revenue rose 25% to $127.6 billion, and Google Cloud's revenue doubled. But profit fell, Search growth slowed, and the company spent more cash than it brought in.

Here's what Alphabet reported and why its share price fell.

Why Is Google Stock Down After Earnings?

Profit came in below expectations. Earnings per share were $2.12, down from $2.87 a year earlier and short of the $3.01 analysts had expected, according to The Motley Fool. Net income fell to $26.5 billion from $35 billion, mostly because of an $8.7 billion loss on Alphabet's investments in other companies, including SpaceX.

Search, still Alphabet's biggest business, also grew more slowly than in the second quarter. It made $63.35 billion, up 12% from a year earlier.

On the earnings call, Alphabet's chief business officer, Philipp Schindler, said currency changes were "the single largest driver" of that slowdown. He added that the growth of AI Mode, Google's chat-style search, also played a part "because of the lower monetization we were seeing in AI Mode."

In other words, people are using AI Mode more, but it doesn't make as much money from ads as regular search yet.

The third worry was cash. Alphabet's free cash flow, the cash left after running the business and paying for new equipment, was negative $9.07 billion, after negative $5.86 billion in the second quarter.

Alphabet Q3 2026 Earnings: Revenue, Profit and Cloud

The strongest result came from Google Cloud, which rents computing power and AI tools to businesses. It made $30.71 billion, up from $15.16 billion a year earlier.

"Google Cloud revenues grew 103%, powered by huge demand for our AI infrastructure and AI solutions," CEO Sundar Pichai said in Alphabet's earnings release. Part of that growth came from selling Google's own AI chip systems, known as TPUs, to other companies.

Pichai also said the Gemini app has reached one billion users, and that Search queries are growing at their fastest rate in five years.

Alphabet's AI Spending: Capex and Free Cash Flow

The negative cash flow comes mostly from spending on AI. Alphabet spent $51.36 billion on capital expenditures in the quarter, mainly servers, networking equipment, and data centers. That's up from $23.95 billion a year earlier.