Alphabet Bulls Dig in After Messy Q3: 'AI Stack Keeps Us Bullish' Cantor Says
Key takeaways
- Alphabet’s cloud growth is strong, but advertising slowdown and higher AI costs are weighing on earnings, prompting analysts to trim targets while staying upbeat on the AI stack.
- Cloud revenue $30.7 billion (103% )
YoY
Year over year — compared with the same period last year.
- Search revenue $63.35 billion (12% )
YoY
Year over year — compared with the same period last year.
- $2.12 vs $2.94 consensus
EPS
Earnings per share — profit for one share of the company, in dollars.
What happened
Alphabet Inc. (GOOGL/GOOG) reported a record‑high cloud revenue of $30.7 billion, up 103% Year over year — compared with the same period last year.YoY
Why it matters
The results highlight a shift in Alphabet’s revenue mix toward cloud, while advertising growth slows. The earnings miss and higher free‑cash‑flow burn raise questions about near‑term profitability and capital allocation. Analysts trimmed price targets but kept upbeat ratings, citing the AI stack’s long‑term upside.
Short-term and longer-term
Short-term. Over the next few days, watch for a rebound in search traffic and any What a company says it expects for future sales or profits — a forecast from the company, not a guarantee.guidance
Longer-term. Over the coming months, the focus will be on how Alphabet balances its cloud expansion with advertising revenue.
Words on this card
- AI stack
- The collection of hardware, software, and services that enable artificial intelligence applications.
- Backlog
- The total value of orders received but not yet fulfilled.
- Capex
- Capital expenditures, the money a company spends on long‑term assets.
- Free cash flow burn
- The amount of cash a company uses to fund operations and investments, exceeding its cash generation.
- Unrealized loss
- A loss on an investment that has not yet been sold.
- EPS Learn
- Earnings per share — profit for one share of the company, in dollars.