EL7.AI
StocksMediumUpdated×2•Originally published 30 October 2026•Updated 30 October 2026•
2 min read

Alphabet Falls 12.6% After Quarterly Results Heighten Investor Concerns Over AI Costs

Key Facts

1Alphabet’s Class A shares fell 12.6% on October 29, their worst daily performance since beginning trading more than 20 years ago.
2Alphabet’s consolidated revenue rose 25% to $127.6 billion in the third quarter, while net income was $26.170 billion, compared with $34.979 billion a year earlier.
3Google Cloud revenue reached about $30.709 billion in the third quarter, compared with $15.157 billion in the same period of 2025.
4Amazon’s purchases of property and equipment exceeded $51 billion in the third quarter.
5Amazon forecast cash capital expenditures of about $220 billion in 2026, most of it for AI data centers.

Alphabet’s Class A shares fell 12.6% on October 29, their worst daily performance since beginning trading more than 20 years ago, according to The Associated Press. The decline came after the company reported quarterly results showing growth in total revenue alongside a drop in net income from a year earlier. Alphabet shares closed at $283.82, according to EL7 data. Investors refocused on whether growth in its AI and cloud businesses would keep pace with the sums technology companies are pouring into infrastructure.

Alphabet said consolidated revenue rose 25% to $127.6 billion in the third quarter of 2026. But net income available to common shareholders fell to $26.170 billion, compared with $34.979 billion in the third quarter of 2025. In search, Google Search & other revenue reached about $63.350 billion, up from $56.567 billion a year earlier. The results showed rapid expansion in cloud alongside search growth, while the decline in net income shaped investors’ assessment of the cost of that expansion.

Thomas Kurian, head of Google Cloud, said sales of TPU systems are expected to rise further in the current quarter and expand strongly during 2027. This represents an additional growth path for the cloud business, as demand for chip systems and computing infrastructure is tied to the expansion of corporate AI use. Meanwhile, Amazon’s purchases of property and equipment exceeded $51 billion in the third quarter, and the company said the spending put further pressure on free cash flow. Chief Executive Andy Jassy also forecast cash capital expenditures of about $220 billion during 2026, most of it going toward building AI data centers. The two companies’ figures set growth in computing demand against the cash commitments needed to expand capacity.

Amazon closed at $243.79 on October 29, according to EL7 data. In the economic backdrop, the U.S. Bureau of Economic Analysis’ advance estimate showed real gross domestic product grew at an annual rate of 3.4% in the third quarter, after growth of 2.2% in the second quarter. Investment, consumer spending and government spending contributed to the increase in the third quarter. In the bond market, the yield on the 10-year U.S. Treasury fell to 4.94% on October 30, from 5.05% late on October 28, according to The Associated Press. The Bureau of Economic Analysis is scheduled to publish its second estimate of third-quarter GDP on November 25, 2026, alongside corporate earnings data.

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