Shares in Google parent Alphabet slipped 12% on Thursday, 29 October, the biggest one-day plunge the company has seen since going public 22 years ago, after a third-quarter earnings report that disappointed investors.
Net profit slid 25% from a year earlier to US$26.2 billion, or US$2.12 per share, well short of analyst expectations. Alphabet booked a US$8.7 billion loss on its equity investments, which it attributed to its stake in SpaceX.
Revenue rose 25% to US$127.6 billion, slightly below the roughly US$128 billion analysts had forecast. Advertising revenue grew 11% to US$82.0 billion, short of expectations. Revenue from Google’s search business, still the company’s largest source of income, rose 12% to US$63.4 billion, slowing from 17% growth in the previous quarter. YouTube advertising revenue grew 9% to US$11.2 billion, down from 13% growth in the previous quarter.
The bright spot was Google Cloud, where revenue jumped 103% to US$30.7 billion, ahead of analyst expectations. But investors focused on signs that artificial intelligence is weakening the search advertising business: AI Mode searches generate less advertising revenue than classic searches, and Alphabet spent US$51.4 billion on capital expenditure during the quarter, mostly on data centres and AI chips, leaving a US$9.1 billion free-cash-flow gap for a second straight quarter.
Sources: AFP via Malay Mail — https://www.malaymail.com/news/money/2026/10/29/shares-in-google-owner-alphabet-drop-more-than-10pc-after-profit-miss-advertising-slowdown/241101 and Marketplace — https://www.marketplace.org/story/2026/10/29/why-did-alphabet-stock-plummet-today
