Google misses Wall Street expectations, Alphabet stock sinks in early
after-hours trading
[October 29, 2026] By
KAITLYN HUAMANI
Google parent company Alphabet Inc. came up short of Wall Street
expectations despite strong revenue growth in its third-quarter results,
which sent its stock falling in after-hours trading Wednesday.
The Mountain View, California-based company said its net income was
$26.17 billion in the July-September period. That’s down from $34.98
billion in the same period a year earlier.
Revenue grew 25% from the same period last year to $127.58 billion, but
that was shy of analysts' expectations. Analysts, on average, were
expecting revenue of $127.97 billion, according to a poll by FactSet.
The company earned $2.12 per share, reflecting an $8.7 billion loss on
equity investments that reduced earnings by 55 cents per share. Analyst
estimates were around $3.01 per share.
Sundar Pichai, CEO of Google and Alphabet, said in a statement that the
quarter was strong and that the company is “now on a half-trillion
dollar revenue run rate. Our deep full stack approach is driving
momentum across the business,” he said, pointing to the 25% revenue
growth year-over-year.
Pichai also said the Gemini app, its artificial intelligence assistant,
has reached 1 billion users, which makes it the fastest-growing product
in Google’s history.
Google and Alphabet's Chief Financial Officer Anat Ashkenazi said on a
call with investors Wednesday that the company continues to expect its
capital expenditures to “increase significantly” in 2027, which she said
will be explained in further detail during the fourth quarter call.
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 The company's revenue growth was
driven by its Google Cloud segment, which delivered record growth.
Its revenue increased 103% from last year to $30.7 billion.
Pichai said that the company's AI infrastructure and solutions are
the “major drivers for cloud growth and our customers see us as the
leading provider here, so there’s huge demand.”
“Alphabet was viewed as behind in the AI race not long ago, and this
quarter makes a real case that it can start taking the lead from
Microsoft. The problem is everything else,” said David Wagner, head
of equity and portfolio manager at Aptus Capital Advisors.
Google Search and other advertising revenues increased by 12% to
$63.3 billion, and advertising revenue from YouTube, which Google
owns, increased 9% to $11.2 billion. These increases came in lower
than some analysts expected, sparking concerns about a deceleration
in growth despite Pichai saying the year-over-year query growth rate
is the highest it’s been in the last five years.
“In a market worried about AI cannibalizing the franchise, investors
need to see Search accelerating, not decelerating,” Wagner said in a
statement.
Alphabet’s shares had fallen more than 10% to $289.95 in after-hours
trading.
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