As of 9:15 AM IST, Thursday 29 October 2026. Share moves are from after-hours trading on Wednesday in New York and may change when regular trading opens.
Alphabet shares fell about 10% in after-hours trading on Wednesday after the Google parent missed Wall Street's forecasts for revenue and profit and reported negative free cash flow of $9.07 billion, as its spending on AI infrastructure outpaced the cash its business generated. Microsoft, reporting the same evening, beat expectations on the strength of 48% growth in its Azure cloud business, and its shares rose 2% to 4%. The contrasting results sharpened investor focus on which tech giants are earning a return on their huge AI investments.
Alphabet: first double miss in nearly four years
According to CNBC, compared with analyst estimates compiled by LSEG:
- Revenue: $127.58 billion vs. $128.22 billion expected, up 25% from a year earlier.
- Adjusted earnings per share: $2.67 vs. $3.02 expected.
- Net income: $26.17 billion, down from $34.98 billion a year earlier.
- Free cash flow: negative $9.07 billion, far worse than the negative $2.70 billion analysts expected.
- Search revenue: $63.35 billion, below the $64.96 billion estimate, according to CNBC's after-hours report.
CNBC said it was the company's first miss on both revenue and earnings in nearly four years. Equity holdings, including stakes in SpaceX and Anthropic, produced a $99.03 billion gain in the second quarter but an $8.66 billion loss in the third. One bright spot was Google Cloud, where revenue more than doubled to $30.7 billion, ahead of the $28.7 billion analysts expected.
AI spending keeps climbing
Alphabet's capital expenditure was $51.36 billion in the quarter, below the $55.09 billion analysts expected. It kept its full-year capex forecast at $195 billion to $205 billion. Chief financial officer Anat Ashkenazi said the company expects capex "to increase significantly in 2027" and will give details on its fourth-quarter call; CNBC reported that 2027 spending is expected to exceed $300 billion. Long-term debt rose to $125.1 billion from $21.6 billion a year earlier.
Microsoft: Azure up 48%
Microsoft's results for its fiscal first quarter, ended 30 September, showed:
- Revenue: $92.3 billion, up 19%.
- Adjusted earnings per share: $4.89, up 18%, vs. $4.73 expected.
- Azure revenue: up 48%.
- Microsoft Cloud revenue: $63.9 billion, up 30%.
- Commercial remaining performance obligation (contracted future revenue): up 73% to $677 billion.
This was the first quarter under Microsoft's new reporting structure. Its Agents and Infra segment, which includes Azure and Microsoft 365 cloud, grew 25% to $76.8 billion, while Devices and Consumer, including Windows, Xbox and search, fell 3% to $15.5 billion. Capital expenditure including leases was $39.37 billion, below the roughly $45.9 billion analysts expected, Yahoo Finance reported.
What it means
Both companies showed strong demand for cloud and AI services. The difference for investors was cash: Microsoft beat forecasts while spending less than expected, whereas Alphabet's spending pushed free cash flow negative. Amazon and Intel are due to report later on Thursday, US time.
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