Key Insights
- Google stock (GOOGL) price plunged after Alphabet missed quarterly revenue expectations.
- Google Cloud revenue surged 103%, reaching $30.71 billion quarterly.
- Alphabet reported lower earnings, while Search and YouTube missed estimates.
GOOGL stock fell sharply after Alphabet missed third-quarter revenue expectations, despite record sales and rapid growth at Google Cloud.
The GOOGL stock price dropped 9.74% in after-hours trading to $293.80, following a regular-session close of $324.89. Alphabet reported $127.58 billion in revenue, below the $127.93 billion estimate.
Its results also showed weaker-than-expected Search and YouTube advertising revenue, alongside lower earnings per share. On October 19, SPCX stock price climbed more than 3% during the trading session ahead of SpaceX’s earnings release.
Google Stock Reverses Gains After Quarterly Results
Before the Alphabet earnings release, the Google (GOOGL) stock price gained $4.31, or 1.34%, during the regular session. The stock ended at $324.89 after trading within a relatively narrow range. However, the subsequent sell-off erased those gains and pushed shares below $300.
The GOOGL stock price fell $31.09 from its regular-session close. The chart also showed a volume spike as the after-hours decline began. Shares subsequently slipped toward $290 before recovering slightly to $293.80.
Meanwhile, Alphabet recorded 25% annual revenue growth, reaching $127.58 billion for the quarter. Earnings per share declined to $2.12 from $2.87 a year earlier. Operating income totaled $40.58 billion, compared with analysts’ $43.16 billion estimate.
The company’s operating margin also fell to 31.8%, down from 34% in the second quarter. Capital expenditures reached $51.36 billion, below the $55.78 billion estimate. Together, these figures accompanied the sharp after-hours movement in Google stock.
Search and YouTube Miss Estimates as Cloud Revenue Doubles
Alphabet’s Google Services business generated $96.30 billion in third-quarter revenue, missing the $98.40 billion estimate. Still, that represented 11% growth from $87.05 billion in the same quarter last year. The previous year’s third-quarter growth rate stood at 14%.
Within Services, Google Search and Other produced $63.35 billion, below the $64.85 billion estimate. Revenue increased 12% from $56.57 billion a year earlier. YouTube Ads contributed $11.21 billion, compared with expectations of $11.43 billion.
Despite missing that estimate, YouTube advertising revenue rose 9% from $10.26 billion a year earlier. Google Network revenue reached $7.46 billion, increasing 1% from $7.35 billion. Subscriptions, Platforms and Devices produced $14.29 billion, up 11% from $12.87 billion.
By contrast, Google Cloud exceeded estimates with $30.71 billion in revenue, against expectations of $29.10 billion. Cloud revenue jumped 103% year over year. The increase coincided with misses across Search, YouTube advertising, and overall Google Services revenue.
For comparison, Microsoft reported $92.3 billion in quarterly revenue, while Alphabet posted approximately $127.6 billion. Both companies recorded quarterly revenue highs. However, Microsoft shares climbed as much as 6% after hours following its earnings beat.
Analysts Discuss Advertising Performance and Computing Costs
The earnings report also prompted commentary on Alphabet’s core advertising business. Stock Talk, a financial commentary account with more than 400,000 followers, highlighted the search and advertising misses.
The account argued that declining engagement with conventional search links and growing AI agent use could affect advertising. Its remarks reflected the account’s assessment rather than a finding in Alphabet’s reported financial figures.
Separately, VanEck digital assets research head Matthew Sigel shared details from Alphabet’s earnings call. Alphabet began using third-party computing capacity near the end of the third quarter because of supply constraints. It expects to increase that usage during the fourth quarter.
Management also expects near-term margin pressure associated with the additional computing capacity. However, Alphabet maintained its 2026 capital expenditure guidance of $195 billion to $205 billion. It also expects capital spending to increase significantly in 2027, with further details planned for its fourth-quarter call.
Beyond quarterly results, Apple and Google were hiring specialists in stablecoins, blockchain, and tokenization a month earlier. Those openings related to digital payments and institutional financial infrastructure. Separately, months earlier, the Solana Foundation and Google Cloud launched Pay.sh, a stablecoin payment system for AI agents.
