Alphabet Shares Slide 10% After Revenue Miss and High AI Spending
· Business · CNBC, Investing.com, MarketWatch
Alphabet shares dropped more than 10% after the company reported third-quarter revenue of $127.58 billion, missing analyst expectations of $128.22 billion. The company recorded a negative free cash flow of $9.07 billion, significantly wider than the $2.70 billion projected by analysts. Capital expenditures reached $51.36 billion for the quarter, with the company confirming that annual spending is expected to exceed $200 billion this year and rise significantly in 2027. Despite the overall revenue miss, Google Cloud revenue surged to $30.7 billion, more than doubling from the previous year and outpacing market forecasts. Long-term debt for the company climbed to $125.1 billion, marking a 479% increase compared to the same period last year.
Why it matters
The surge in capital expenditure highlights the massive financial commitment required to maintain competitiveness in the AI sector, impacting investor sentiment regarding Alphabet's short-term profitability. This spending trajectory signals a long-term shift in how major tech firms allocate resources to capture market share in cloud and AI services.
Read the original report — CNBC
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