Alphabet reported results for the third quarter of 2026. Revenue fell short of market expectations, and earnings per share also missed forecasts, while Google Cloud delivered one of its strongest-ever growth rates. The stock nevertheless fell more than 8% in after-hours trading.
Alphabet’s results for the third quarter of 2026 fell short of market expectations for revenue, while EPS came in well below forecasts. Revenue rose 25% year on year to $127.6 billion, below the market forecast of $128.2 billion, while EPS was $2.12, below the market forecast of $2.99. Net income was $26.2 billion, and revenue excluding payments to partners was $111.2 billion.
Google Cloud revenue, however, rose 103% from the previous quarter to $30.7 billion, exceeding the market forecast of $29.2 billion. Although the business captured demand related to AI, this was not enough to offset the overall revenue and earnings shortfalls. In after-hours trading following the earnings announcement, both Class A and Class C shares plunged, falling significantly from their year-to-date highs.
Alphabet maintained its full-year capital expenditure range of $195 billion to $205 billion and showed no indication of easing investment in AI data centers and related areas. Free cash flow was negative $9.07 billion, and market concerns over the path to recovering these investments remain.