Alphabet falls 10% after hours on a profit miss as Microsoft beats
Alphabet missed revenue and earnings forecasts and reported negative free cash flow of $9.1bn despite cloud revenue doubling, while Microsoft beat on Azure.
Source published · In the Daily Brief of 29 October 2026
Filed under Markets, AI industry, Credit risk
Alphabet reported third-quarter revenue of $127.6bn, up 25%, and Google Cloud revenue of $30.7bn, up 103%. Earnings per share of $2.12 fell short of forecasts, pulled down by an $8.2bn non-operating expense that included unrealised investment losses. Quarterly capital spending of $51.4bn left free cash flow at minus $9.1bn. The company kept its 2026 capital-spending guidance at $195bn–$205bn and expects spending above $300bn in 2027. Its shares fell 10.12% in after-hours trading, according to Closing Look.
Microsoft reported revenue of $92.28bn against a consensus of $90.69bn and disclosed Azure revenue in dollars for the first time: $33.17bn, up 48%. Its shares rose in extended trading.
According to Bloomberg, as reported by BigGo Finance, five-year credit default swaps on both companies reached record highs in October, a sign that credit investors are repricing the risk of the AI build-out.