Alphabet shares drop as Q3 profit falls 25% on SpaceX stake loss
The Guardian reports Alphabet's Q3 net profit fell 25% to $26.2bn, missing forecasts, while revenue rose 25% to $127.6bn; shares fell double digits.
What you need to know
The Guardian reports Alphabet's third-quarter net profit fell 25% year over year to $26.2bn, below FactSet analyst expectations, while revenue rose 25% to $127.6bn, slightly under forecasts. Shares fell double digits, erasing roughly $500bn in market value, after results also showed slower advertising growth and continued heavy AI spending.
- Net profit fell 25% to $26.2bn, or $2.12 a share, short of FactSet expectations
- Revenue rose 25% to $127.6bn, slightly below the roughly $128bn analysts forecast
- An $8.7bn equity-investment loss was attributed to the SpaceX stake
- Google Cloud revenue jumped 103% to $30.7bn, with operating income tripling to $11.1bn
- Capital expenditures reached $51.4bn, with 2026 capex guidance of $195bn-$205bn
Profit miss and the SpaceX stake
Alphabet reported third-quarter net profit of $26.2bn, or $2.12 a share, down 25% from a year earlier and below analysts surveyed by FactSet, The Guardian reported. The company booked an $8.7bn loss on equity investments, which it attributed to its stake in SpaceX, the Elon Musk-led company whose shares have struggled since going public in June.
Revenue rose 25% to $127.6bn, slightly under the roughly $128bn analysts had forecast. Shares fell double digits Wednesday evening into Thursday trading, erasing hundreds of billions of dollars in market value from the $4tn company.
Advertising slows as cloud accelerates
Advertising revenue grew 11% to $82bn, short of expectations. Search revenue rose 12% to $63.4bn, slowing from 17% growth the previous quarter, while YouTube advertising grew 9% to $11.2bn, down from 13%.
Google Cloud revenue jumped 103% to $30.7bn, ahead of analyst expectations, and operating income for the unit tripled to $11.1bn. The company said sales of its in-house TPU AI chips contributed significantly to that growth.
Spending plans
Capital expenditures reached $51.4bn in the quarter, more than double the $24bn a year earlier. Alphabet's latest 2026 capex forecast is $195bn-$205bn, and it said it would continue to increase spending significantly in 2027. The company's spending outstripped cash generated by its businesses for a second straight quarter, leaving a $9.1bn gap, according to The Guardian.
How much did Alphabet's capital expenditures reach in the quarter?
Alphabet spent $51.4bn on capital expenditures during the quarter, mostly on datacenters and AI chips, more than double the $24bn a year earlier. Its 2026 capex guidance is $195bn-$205bn.
Sources & context
- Google owner Alphabet loses $500bn in market value after profit disappoints Wall Street ↗The Guardian
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