The key facts

  • Revenue excluding partner payouts — $111.2 billion versus a forecast of $111.3 billion; earnings per share $2.12 versus the expected $2.99
  • A loss of $8.7 billion from equity investments, including stakes in SpaceX and Anthropic
  • Capital expenditures in 2026 could reach $205 billion — more than double the year before

Earnings below expectations

Shares of Alphabet, Google's parent company, fell more than 10% in after-hours trading after the company reported third-quarter revenue and profit below Wall Street expectations. Revenue excluding partner payouts came in at $111.2 billion for the three months ended September 30 — slightly below the analysts' average forecast of $111.3 billion. Net earnings per share were $2.12 versus the expected $2.99. The National reports this.

AI spending and investor pressure

The race to build AI infrastructure has pushed the company's spending to record levels, and investors are increasingly demanding proof that these outlays pay off. In July, Alphabet said its capital expenditures this year would reach $205 billion — more than double last year's figure. For the second quarter in a row, the company posted negative free cash flow: in the third quarter it came in at minus $9.1 billion.

Investments and the cloud business

Equity investments played a significant role in the decline in net profit: they produced a loss of $8.7 billion — a sharp reversal from the profits a year earlier and in the second quarter, which were driven largely by stakes in SpaceX and, as Bloomberg later established, the private company Anthropic. Meanwhile, the cloud division, a key indicator of demand for AI products and hosting, posted revenue of $30.7 billion and profit of $11.1 billion — above forecasts of $29.1 billion and $9.8 billion respectively.

Search and AI competition

Revenue from Search and related businesses came to $63.4 billion versus expectations of $64.9 billion — it is precisely the advertising and search business that funds the company's AI investments. Google is rethinking search for the AI era, serving AI-generated answers to many queries, which changes the conditions for businesses that have traditionally depended on the search engine's traffic and advertising revenue. According to the report, in recent months the company lagged behind Anthropic and OpenAI in developing AI tools for programming; it recently released Gemini 4, which, it says, is strong at coding and cybersecurity, although some employees fear the gap has not been fully closed.