Alphabet shares were down 10% in premarket trading Thursday, while Microsoft gained nearly 4%, following the companies’ third-quarter earnings results. Alphabet reported negative free cash flow of $9.07 billion, far worse than the $2.70 billion analysts had expected, while Microsoft generated positive free cash flow of $18.63 billion. Microsoft invested $45.2 billion in capital expenditures and finance leases, up 30% from a year earlier but below analysts’ estimate of $50.67 billion. Alphabet’s search advertising revenue grew 12% to $63.35 billion but missed expectations, adding further pressure on the stock. Investors are assessing technology companies’ artificial intelligence spending and returns, while Alphabet maintained its full-year capital expenditure guidance of between $195 billion and $205 billion.
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