Alphabet Shares Fall 10% Following Q3 Earnings Miss as Capital Spending Hits $51.4 Billion

In 2026, companies invested hundreds of billions of dollars into artificial intelligence infrastructure. This spending prompted market comparisons to the 2000 dot-com crash. Alphabet faced regulatory scrutiny throughout the year. A US judge rejected a Justice Department request to force the divestiture of Alphabet's advertising technology business. The court instead imposed operational restrictions on the firm.

Investors now monitor Alphabet's ability to balance infrastructure costs with revenue growth in its advertising and cloud divisions. The broader tech landscape saw shifts in strategy, including Microsoft's October 2026 announcement of a voluntary buyout program for 60,000 employees to facilitate its own AI transition. Alphabet’s recent financial performance highlights the intensity of this spending, as the company recorded $51.4 billion in capital expenditures for the third quarter, more than double the $24 billion spent in the same period last year. To support these AI ambitions, the company raised $28.7 billion through bond sales and $12.4 billion via new share issuances.

1. Google Cloud revenue grew 103% year-on-year to $30.7 billion in the third quarter.

2. Waymo, Alphabet's autonomous driving division, provides over 500,000 paid rides per week across 15 US metropolitan areas.

1. On October 28, 2026, Alphabet shares fell more than 10% in after-hours trading. The company missed investor expectations for revenue and earnings.

2. The company reported negative free cash flow of $9.07 billion for the third quarter. Capital expenditures reached $51.4 billion during that same period.

3. Alphabet reported an $8.7 billion loss on equity investments during the quarter. The loss stemmed primarily from the company's stake in SpaceX.