Alphabet shares fall more than 10% after profit misses and heavy AI spending

Alphabet, Google's parent company, reported July-to-September results that fell short of Wall Street expectations, and its shares dropped more than 10% in after-hours trading on Wednesday. Net profit slid 25% from a year earlier to $26.2 billion, or $2.12 a share, while revenue rose 25% to $127.6 billion, slightly below forecasts of about $128 billion. The company booked an $8.7 billion loss on equity investments, which it tied to its stake in SpaceX. Advertising revenue grew 11% to $82 billion, and Google Cloud revenue jumped 103% to $30.7 billion. Free cash flow was negative $9.07 billion, against analyst expectations of nearly breaking even, according to LSEG data, and Chief Financial Officer Anat Ashkenazi said capital expenditures will increase significantly in 2027.

The New York Post, the right-leaning source, headlines its story that AI is battering Alphabet's cash flow and leads with the negative free cash flow, up from $5.9 billion in the prior quarter, quoting Ashkenazi on rising capital spending. It also highlights a $7.66 billion operating loss in Alphabet-level activities, which it ties to AI research. The Guardian, the left-leaning source, leads with the investor sell-off and profit miss, stressing the advertising slowdown as search growth eased from 17% to 12% and YouTube ad growth slipped to 9%. Both report the same revenue and share-drop figures, but the Post frames the story as an AI cost problem while the Guardian frames it as weakness in advertising. Investing.com and AP, the alternative sources, add a market angle, citing Microsoft's 3% gain and Samsung's roughly 4% fall, and AP notes the Federal Reserve held rates steady.