Alphabet Shares Plunge Following Third-Quarter Earnings Miss and High AI Capital Expenditures
Alphabet (GOOGL) shares experienced a significant sell-off, dropping over 11% following its third-quarter earnings report. The company reported earnings of $2.12 per share, missing the Wall Street consensus of approximately $3.02. This miss was driven largely by non-operating factors, including an $8.2 billion unrealized loss on its stake in SpaceX and a $5.2 billion EU antitrust fine. Despite the bottom-line shortfall, Alphabet's core growth remains robust, with Google Cloud revenues more than doubling year-over-year and search query volume reaching five-year highs. However, investors are reacting to massive capital expenditures totaling $51.4 billion this quarter as the company builds AI infrastructure. While a $561 billion cloud backlog signals strong future demand, the immediate impact of rising depreciation and cash flow burn is weighing on market sentiment.
Topics: Alphabet earnings miss EU antitrust fine Google Cloud growth SpaceX equity loss Stock price decline