Alphabet (NASDAQ:GOOG) Issues Earnings Results

Alphabet (NASDAQ:GOOG) announced its earnings results on Wednesday. The information services provider reported $2.12 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $3.01 by ($0.89), FiscalAI reports. Alphabet had a return on equity of 46.63% and a net margin of 50.03%. The firm had revenue of $127.58 billion for the quarter, compared to analyst estimates of $127.97 billion. During the same quarter last year, the business earned $2.87 EPS. The company’s revenue for the quarter was up 24.7% compared to the same quarter last year.

Here are the key takeaways from Alphabet’s conference call:

• Revenue and Cloud growth accelerated: Alphabet’s Q3 revenue rose 25% to $127.6 billion, while Google Cloud revenue more than doubled to $30.7 billion and operating income more than tripled to $11.1 billion. Cloud backlog reached $561 billion, supported by strong demand for AI infrastructure, solutions, and TPU systems.
• AI adoption is expanding across the company: Alphabet said Gemini app users reached 1 billion, first-party model APIs processed nearly 32 billion tokens per minute, and new Gemini models are driving developer, enterprise, Search, advertising, and internal productivity gains. The company is also preparing to expand agentic capabilities across Search, Chrome, Android, Workspace, and consumer products.
• Search monetization is beginning to scale with AI: Search queries grew at their fastest rate in five years, while Alphabet is expanding ads in AI Overviews and AI Mode to more users and international markets. Management characterized AI Mode queries as largely incremental and said early advertising experiments showed promising relevance and advertiser results.
• Heavy AI investment is pressuring cash flow and near-term margins: Q3 capital expenditures reached $51.4 billion, producing negative free cash flow of $9.1 billion, while full-year 2026 CapEx remains projected at $195 billion to $205 billion and is expected to rise significantly in 2027. Cloud margins are also expected to face near-term pressure as Alphabet uses third-party compute capacity to address supply constraints.
• Search growth faces tougher comparisons and external headwinds: Management expects foreign-exchange pressure and difficult year-over-year comparisons from the Search acceleration that began late in 2025 to weigh on Q4 growth. Lower monetization of AI Mode queries also contributed to the disconnect between strong query growth and the pace of Search advertising growth.

Alphabet Trading Down 0.4%

NASDAQ GOOG traded down $1.25 during trading hours on Friday, hitting $281.07. The company’s stock had a trading volume of 13,561,363 shares, compared to its average volume of 20,513,799. Alphabet has a twelve month low of $271.41 and a twelve month high of $404.47. The firm has a market capitalization of $3.44 trillion, a P/E ratio of 14.63, a PEG ratio of 0.92 and a beta of 1.19. The company has a quick ratio of 2.64, a current ratio of 2.72 and a debt-to-equity ratio of 0.16. The stock has a fifty day moving average of $336.93 and a 200 day moving average of $338.53.

Key Stories Impacting Alphabet

Here are the key news stories impacting Alphabet this week:

• Positive Sentiment: Google Cloud and AI demand are accelerating. Google Cloud revenue more than doubled year over year to approximately $30.7 billion, while its backlog reportedly reached $561 billion. Alphabet’s Gemini 4 Carbon model also received favorable attention, and OpenAI may become a customer for Google’s internally developed AI chips. Anthropic’s cloud spending and Google Cloud
• Positive Sentiment: Alphabet’s valuation has become substantially cheaper. After the selloff, GOOG trades at roughly 14.6 times earnings, described as its lowest valuation since 2012. Some analysts and financial commentators view the decline as an opportunity because cloud growth, AI infrastructure and potential TPU sales could create new earnings streams. Alphabet’s valuation after the selloff
• Neutral Sentiment: Waymo is expanding internationally through Toyota. Alphabet’s autonomous-driving unit will test Toyota bZ4X vehicles in Japan and the U.K., supporting a longer-term robotaxi expansion strategy. However, Waymo remains a small, cash-burning business within Alphabet’s Other Bets segment. Waymo Toyota robotaxi partnership
• Negative Sentiment: Core search and advertising results missed expectations. Quarterly revenue of about $127.6 billion rose 25% year over year, but EPS of $2.12 fell well short of consensus. Search growth slowed to 12%, YouTube advertising missed forecasts, and executives acknowledged that AI-powered search currently generates less revenue than traditional search. Google search revenue growth slowdown
• Negative Sentiment: AI investment is worsening near-term cash-flow concerns. Alphabet spent roughly $51.4 billion on capital expenditures and reported approximately $9.1 billion in negative free cash flow. Investors are also focused on large future purchase commitments, potential share issuance and an $8.7 billion investment loss, increasing concern that the AI buildout may take longer to generate adequate returns. Alphabet earnings and AI impact on search

Insider Buying and Selling at Alphabet

In other news, Director Frances Arnold sold 83 shares of the firm’s stock in a transaction on Wednesday, September 30th. The stock was sold at an average price of $340.45, for a total value of $28,257.35. Following the transaction, the director directly owned 19,076 shares in the company, valued at $6,494,424.20. This trade represents a 0.43% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 12.99% of the stock is currently owned by company insiders.

Analysts Set New Price Targets

Several brokerages have issued reports on GOOG. Evercore reiterated an “outperform” rating and issued a $435.00 price objective on shares of Alphabet in a research report on Thursday. Piper Sandler reaffirmed an “overweight” rating and issued a $345.00 price target on shares of Alphabet in a report on Thursday. Guggenheim reaffirmed a “buy” rating and issued a $450.00 price target on shares of Alphabet in a report on Thursday. Oppenheimer reiterated an “outperform” rating and set a $400.00 price target (down from $445.00) on shares of Alphabet in a research report on Thursday, July 23rd. Finally, Moffett Nathanson decreased their price objective on shares of Alphabet from $380.00 to $370.00 and set a “buy” rating on the stock in a report on Wednesday, September 16th. Six equities research analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $413.54.

About Alphabet

Alphabet Inc is a technology holding company best known as the parent organization of Google. Founded in 2015 through a corporate restructuring, Alphabet oversees Google and a collection of businesses focused on technology, online services, communications, artificial intelligence, and other emerging areas.

Google’s principal products and services include its internet search engine, digital advertising platforms, YouTube, Android, Chrome, Google Maps, Google Play, and Google Workspace. The company also provides cloud computing, data storage, cybersecurity, productivity, and artificial intelligence services through Google Cloud.