Alphabet stock plunges 11% after earnings miss despite Google Cloud revenue doubling

Alphabet shares plunged approximately 11% in after-hours trading Wednesday after the Google parent reported third-quarter earnings that missed Wall Street expectations, despite more than doubling revenue at its cloud computing division.

The company reported earnings of $2.12 per share, below analysts’ expectations of approximately $3.02, as an $8.7 billion loss on equity investments weighed on profitability.

Revenue increased 25% year over year to $127.6 billion, roughly in line with expectations, while net income declined to $26.2 billion from $34.9 billion a year earlier.

Alphabet shares were down approximately 11% in extended trading at press time, according to Yahoo Finance data.

Alphabet’s after-hours selloff was also reflected across blockchain-based markets, with tokenized shares from Ondo Finance and xStocks, alongside perpetual futures on Hyperliquid, trading broadly in line with the underlying stock’s extended-hours price.

Ondo’s tokenized Alphabet stock (GOOGLon), Kraken’s GOOGLx, and Alphabet perpetual futures on Hyperliquid gave eligible traders a way to gain exposure to the stock’s roughly 11% decline while regular US markets were closed.

With after-hours liquidity typically thin, tokenized equities offer traders another way to buy and hold Alphabet shares, while perpetual futures provide leveraged exposure to price movements.

Google Cloud revenue doubles as investment losses weigh on profit

Google Cloud revenue surged 103% to $30.7 billion during the quarter, driven by demand for AI infrastructure and enterprise cloud services.

The division generated $11.1 billion in operating income, supported by growing demand for Google’s cloud computing platform and tensor processing units.

Despite the strong cloud performance, Alphabet recorded an $8.7 billion loss on equity holdings, reducing net income by approximately $6.7 billion after taxes, or $0.55 per share.

The loss contributed to the earnings shortfall even as Alphabet’s core businesses continued to expand.

Google Search and other revenue increased 12% to $63.4 billion, while YouTube advertising revenue grew approximately 9% to $11.2 billion.

Operating income rose 30% to $40.6 billion, reflecting continued growth in the company’s advertising and cloud businesses.

Alphabet’s capital spending reaches $51.4B as free cash flow turns negative

Alphabet’s capital expenditures more than doubled to $51.4 billion during the quarter, compared with approximately $24 billion a year earlier, as the company accelerated investment in AI infrastructure.

The latest spending brought capital expenditures for the first nine months of 2026 to approximately $132 billion, contributing to negative free cash flow of $9.1 billion during the quarter.

Alphabet had previously increased its full-year capital spending outlook to between $195 billion and $205 billion, reflecting the rising cost of computing capacity needed to support its AI products and services.

The spending underscores the financial pressure facing major technology companies as they expand data center capacity while seeking to turn growing demand for AI services into sustainable profits.

Google unveils Gemini 4 Carbon as AI adoption accelerates

Hours before releasing its earnings, Google introduced Gemini 4 Carbon, a new frontier AI model designed to improve performance in cybersecurity tasks, including vulnerability discovery, exploitation and software patching.

Google said the model achieved more than twice the secure coding success rate of Gemini 4 Argon, which launched two weeks earlier.

Gemini 4 Carbon also secured the top position on the Artificial Analysis Intelligence Index v5.0 with a score of 59, according to the company’s announcement.

The model is initially being made available to selected cybersecurity researchers and defenders through Google’s Fairwind Program while additional safety testing continues.

Google priced Carbon at $2 per million input tokens and $10 per million output tokens.

In the earnings release, CEO Sundar Pichai said Google’s first-party AI model APIs now process nearly 32 billion tokens per minute, more than four times the volume recorded a year earlier.

The Gemini application also reached 1 billion users, highlighting the company’s growing distribution of AI products.