American billionaire Sergey Brin’s Alphabet reported quarterly revenue of $127.6 billion, as its cloud business more than doubled, but the shares fell in late trading as investors weighed soaring spending plans.
Revenue for the third quarter rose 25% from a year earlier, slightly below analysts’ estimates, The Motley Fool reported. Earnings per share fell to $2.12 from $2.87, weighed down by an $8.7 billion net loss on equity securities, or about 55 cents a share.
Google Cloud was the standout. Revenue in the unit jumped 103% to $30.7 billion, and it generated $11.1 billion in operating income, as companies spent heavily on computing power for artificial intelligence. That means the unit now turns more than a third of its revenue into operating profit.
The spending needed to support that growth is rising fast. Alphabet kept its 2026 capital expenditure forecast at $195 billion to $205 billion, and said it expects spending in 2027 to “increase significantly.”
That outlook appeared to unsettle investors. Alphabet shares sank in after-hours trading on Wednesday, dragging on Nasdaq 100 futures.
The reaction matters for Brin, who cofounded Google and whose fortune is tied largely to his Alphabet stake. He ranks among the world’s richest people, and sharp moves in Alphabet’s stock can shift his net worth by billions of dollars in a single session.
Microsoft, which reported results at the same time, moved in the opposite direction. Its revenue rose 19% to $92.3 billion, and its Azure cloud business grew 48% to $33.17 billion. Adjusted earnings of $4.89 a share beat estimates of about $4.72, and its shares rose in late trading.
The contrasting reactions highlight a growing question for investors: how long tech giants can keep increasing AI spending before it pays off. Alphabet’s cloud growth suggests demand is strong, but its rising capital budget means higher costs ahead.
The results land during a busy stretch for Brin outside the company. He is leading a $317 million fight against California’s proposed billionaire tax, which voters will decide on Nov. 3, after earlier spending more than $100 million on the campaign.
The measure would impose a one-time 5% tax on the net worth of California billionaires, including unrealized gains on stock. With most of his wealth held in Alphabet shares, the company’s valuation directly affects how much Brin would owe if it passed.
Alphabet shares will begin regular trading on Thursday, when investors will get a clearer view of how the market has judged the quarter.