Alphabet’s AI spending drives $9.07 billion in negative free cash flow. AI starting to really cannibalize search and ads.

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Alphabet reported today that free cash flow turned negative by $9.07 billion in the third quarter, far below analysts’ expectations, while revenue and earnings also missed forecasts. Its shares fell more than 10% in after-hours trading. On October 28, Reuters reported that Alphabet’s AI-driven cash burn had worsened, and the company said capital spending would rise significantly in 2027. The concern had already been building: on October 15, investors were questioning the debt burden and returns from massive AI infrastructure investments, with CoreWeave carrying nearly $50 billion in debt. The latest Alphabet results put a direct financial cost on the question facing the AI trade: how much cash can companies burn before investors demand better returns?

https://www.reuters.com/business/alphabets-google-cloud-unit-beats-quarterly-revenue-estimates-steady-ai-demand-2026-10-28/

https://www.advisorperspectives.com/articles/2026/10/28/microsoft-alphabet-earnings-focus-ai-cash-flow-drain

https://www.reuters.com/markets/econ-world/safe-havens-2026-10-15/

  • Earnings per share: $2.12. It is not immediately clear if the reported earnings are comparable to the LSEG analyst estimate of $3.02
  • Revenue: $127.58 billion vs. $128.22 billion

https://www.cnbc.com/2026/10/28/alphabet-googl-earnings-q3-2026.html

Google built the AI that’s eating Google’s lunch. Very efficient company.

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