Alphabet shares drop 13% on AI spending and cash burn
In short
Alphabet shares fell 13% after third-quarter results missed expectations. Net profit dropped 25% to $26.17 billion, revenue rose 25% to $127.58 billion, and free cash flow was negative $9.1 billion. The report says heavy AI spending and slower search ad growth were part of the problem.
This matters because investors are worried about how much Alphabet is spending and whether profits will stay under pressure. The report does not say when spending may slow or how long the stock weakness could continue.
What the reporting says
Alphabet shares fell 13% after third-quarter earnings missed expectations, with heavy AI spending and slowing search ad growth cited in the report. Net profit dropped 25% to $26.17 billion even as revenue rose 25% to $127.58 billion, and free cash flow was negative $9.1 billion. The immediate concern is that higher capital spending could keep pressuring margins, but the report does not say how long the spending pace will last.
Why it matters
Alphabet shares sold off after third-quarter earnings missed expectations, with the publisher summary pointing to heavy AI spending and slower search ad growth. The report gives the key figures: net profit fell 25% to $26.17 billion, revenue rose 25% to $127.58 billion, and free cash flow was negative $9.1 billion. Those numbers fueled concerns that rising capital expenditure could weigh on margins and investor sentiment.