Skip to main content
TickerPosts
GOOGLGOOGAlphabetGoogleearningsstock newsartificial intelligence

Alphabet (Google) Stock Falls 12.6% After Q3 Earnings Miss

Steven Levine, Founder of TickerPosts and OpenClassActions.com2 min read
Railway tracks in rural UK surrounded by greenery under a bridge at sunset.
Illustrative photo by Mike Bird on Pexels

Alphabet's Class A shares (NASDAQ: GOOGL) fell 12.6% on Thursday, October 29, their worst single-session decline since the shares began trading, according to the Associated Press. The drop followed the company's third-quarter report, released after Wednesday's market close.

The results contained strong growth alongside a small revenue miss and a much larger earnings-per-share shortfall. That mix put attention on how much of Alphabet's AI investment can translate into durable returns.

Revenue grew, but fell short of estimates

Alphabet reported revenue of $127.58 billion, up 25% from a year earlier. FactSet analysts had expected $127.97 billion, according to AP. Diluted earnings were $2.12 per share, compared with analyst estimates of about $3.01. The company reported an $8.7 billion loss on equity investments, which reduced earnings by 55 cents per share.

Google Cloud was a bright spot: revenue increased 103% to $30.7 billion. Google Search and other advertising revenue grew 12% to $63.3 billion, while YouTube advertising revenue rose 9% to $11.2 billion. Both ad-growth rates were below some analysts' expectations, even as management cited strong growth in search queries.

AI growth also raises the spending question

Alphabet's earnings release reported more than $51 billion of purchases of property and equipment during the quarter. Chief Financial Officer Anat Ashkenazi said the company continued to expect capital expenditures to increase significantly in 2027, with more detail expected on the next earnings call.

That scale of spending is relevant because it adds capacity for Google Cloud and other AI services, but the cash and eventual returns arrive on different schedules. The earnings report alone does not show what share of future profit will come from today's investment.

Why the market reaction was so large

Alphabet is one of the largest companies in the S&P 500, so a move of this size can affect an index even when most constituent stocks are higher. AP reported that four out of five S&P 500 stocks rose Thursday, while Alphabet's decline helped pull the index lower.

The results do not show that every Alphabet segment weakened. Cloud growth was rapid, and search advertising still expanded. Investors were weighing those results against the earnings shortfall, slower-than-hoped ad growth and the cost of expanding AI infrastructure. The price reaction reflects that reassessment; it does not by itself settle the longer-term return on the investment.

Follow the GOOGL and GOOG discussions on TickerPosts.

Published October 29, 2026. This article is informational and is not investment advice.

Sources