Alphabet Shares Fall After Third-Quarter Earnings Miss and Search Revenue Concerns
Alphabet (GOOGL) shares fell nearly 11% in premarket trading following a third-quarter financial report that missed both top and bottom-line expectations. The company reported adjusted earnings of $2.67 per share on revenue of $127.58 billion, marking its first miss in nearly four years. Additionally, Alphabet reported negative free cash flow of $9.07 billion, significantly lower than the anticipated $2.70 billion. The results have sparked investor concern regarding the monetization of artificial intelligence and potential headwinds for the core search business. While query growth reached a five-year high, analysts noted challenges in transitioning revenue from traditional search to AI Overviews. Consequently, Citizens downgraded the stock to 'market perform,' while other major banks like Bank of America and BMO maintained positive ratings but lowered their price targets.
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Topics: AI Investment Alphabet Q3 Earnings Analyst Downgrade Free Cash Flow Search Revenue
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