Alphabet reported adjusted earnings of $2.67 per share on revenue of $127.58 billion in the third quarter, both below LSEG consensus estimates. It was the company’s first simultaneous revenue and earnings miss in nearly four years, alongside negative free cash flow of $9.07 billion and softer-than-expected search revenue. Investors focused on AI monetization and full-year capital expenditure guidance of $195 billion to $205 billion, while the shares fell nearly 11% in premarket trading. Citizens downgraded Alphabet to market perform, citing challenged search monetization during the transition to AI agents. Several other banks cut their price targets but retained mostly positive ratings, while Alphabet said AI Mode was driving the fastest search-query growth in five years.
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