Alphabet’s third-quarter results missed analyst estimates on earnings and revenue, CNBC reports, even as Google Cloud revenue more than doubled to $30.7 billion against about $28.7 billion expected.
Free cash flow was negative $9.07 billion, where analysts had pencilled in a positive $2.70 billion. CNBC puts the swing down to capital spending, a $5.2 billion payment after the appeal over a 2018 European Commission fine ended, and inventory built up for TPU system sales.
Subtract the fine and, on those figures, free cash flow would still have been negative by roughly $3.9 billion.
The spending figure matters because it sets the bar the cloud revenue has to clear. Alphabet held its 2026 capital spending guidance at $195 billion to $205 billion. Its finance chief expects spending to rise significantly in 2027.
Shares fell about 8% to 10% in after-hours trading, depending on the report. At least one analyst downgraded the stock.
CNBC separately reports that Google and Microsoft have put off raising their capex forecasts, which is a pause rather than a cut.
The cloud number is the one Alphabet wanted the market to read. It was larger than expected and still did not hold the shares up, because the cash line pointed the other way.
What is missing is the split between money spent once and money that will keep being spent. Until the TPU inventory sells through, the negative cash flow cannot be sorted into a bill and a build.
