Alphabet Shares Fall 10% as Search Slows and Cash Deficit Widens

Alphabet shares fell about 10% in after-hours trading after its third-quarter results paired slower Search revenue growth and a wider free-cash-flow deficit with a more than doubling of Google Cloud revenue.

Alphabet posted $127.6 billion in revenue, up 25% from a year earlier but below the $128.2 billion estimate. Google Cloud revenue climbed 103% to $30.709 billion, and its operating profit reached $11.121 billion, about 3.1 times the year-earlier figure. Its operating margin rose to 36.2% from 23.7%.

Search and other revenue rose 12% to $63.35 billion. Search query growth reached a five-year high, but total advertising revenue of about $82 billion missed an $83.4 billion estimate.

Operating cash flow of $42.29 billion was lower than $51.355 billion in capital spending, leaving free cash flow at negative $9.07 billion. That was wider than the $5.9 billion deficit in the prior quarter. Higher TPU inventories and a $5.2 billion payment of an EU fine also affected quarterly cash flow.

Alphabet maintained its 2026 capital-spending outlook of $195 billion to $205 billion and expects spending to rise significantly in 2027, without specifying an amount.