Alphabet shares fell nearly 10% after hours following quarterly results that missed expectations. Revenue increased about 25% to $127.6 billion, but adjusted earnings per share declined 7% to $2.67, while GAAP earnings per share came in at $2.12. Google Cloud stood out with revenue doubling to $30.71 billion and operating income reaching $11.12 billion, but Search advertising growth slowed. Alphabet maintained its 2026 capital expenditure guidance of $195 billion to $205 billion, expects spending to exceed $300 billion in 2027, and reported negative free cash flow of $9.07 billion in the third quarter. The stock remains undervalued in the author’s view, but its rating and price target are under review.
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