Alphabet reported Q3 revenue of $127.58 billion, a 25% YoY rise, but it fell $0.64 billion short of the $128.22 billion consensus. The adjusted EPS of $2.67 was $0.35 below the $3.02 expectation, and shares fell 10% in after‑hours trading.
Free cash flow turned negative at $9.07 billion, compared to the $2.7 billion analysts had forecast. Capex was $51.36 billion, $4.3 billion under the $55.09 billion projection, while the company confirmed a 2027 capex target that could reach $300 billion.
Alphabet booked a $99.03 billion windfall from its stakes in SpaceX and Anthropic, yet overall equity holdings dipped $8.66 billion. Google Cloud revenue doubled to $30.7 billion, surpassing the $28.7 billion consensus, signalling a shift in the cloud market.
CEO Sundar Pichai told analysts that the Argon Gemini model is garnering strong demand, and Google Cloud CEO Thomas Kurian said the company is capturing market share from AWS and Azure. The narrative points to a strategic pivot toward high‑margin AI and cloud services.
Alphabet's long‑term debt has surged to $125.1 billion from $21.6 billion a year earlier, raising liquidity concerns. Management will provide a detailed capex roadmap in the Q4 earnings call on May 15, while investors weigh the impact of the 2027 spend on future profitability.