The Newshound

US tech giant Alphabet's shares sink 10% after Google owner burns $9bn cash on AI and misses profit targets

A Google DeepMind promotional screen introducing Gemini, the AI brand whose new Gemini 4 Carbon model Sundar Pichai unveiled just before Alphabet's earnings call as its shares tumbled over 10%.
A Google DeepMind promotional screen introducing Gemini, the AI brand whose new Gemini 4 Carbon model Sundar Pichai unveiled just before Alphabet's earnings call as its shares tumbled over 10%.
A data graphic showing Alphabet's share price movement, as an $8.7bn loss on equity investments tied to its SpaceX stake compounded the earnings miss.
A data graphic showing Alphabet's share price movement, as an $8.7bn loss on equity investments tied to its SpaceX stake compounded the earnings miss.

Alphabet's net profit crashed 25% to $26.2bn in the July-to-September quarter, dragged down by an $8.7bn loss on equity investments including its stake in Elon Musk's SpaceX, which has struggled since floating in June. Chief Financial Officer Anat Ashkenazi warned that capital expenditure will "increase significantly" in 2027, on top of this year's already-eye-watering forecast of up to $205bn, sparking fears the AI spending binge is spiralling beyond control.

Google Cloud was the lone bright spot, with revenue more than DOUBLING to $30.7bn — but investors said it was not enough to rescue the stock.

Alphabet has now burned cash for two straight quarters — the first time in its 22-year history as a public company that free cash flow turned negative.

CEO Sundar Pichai insisted the quarter was 'strong' and trumpeted the Gemini AI app hitting one billion users, making it Google's fastest-growing product ever.

MoreThe IndependentGoogle shares in freefall after profit collapse and shock 8 billion dollar investment wipeoutThe TelegraphGoogle shares slump amid fears of AI overspendingReutersNasdaq futures fall 1% as Alphabet results intensify AI spending fearsNYTAlphabet’s Revenue Rises 25% as Profit FallsAPGoogle misses Wall Street expectations, Alphabet stock sinks in early after-hours tradingHuffPostAlphabet Shares Fall After Revenue Miss, Cash Burn WorsensWashington TimesAlphabet stock plummets as AI spending turns cash flow negativeThe GuardianInvestors turn on Google owner Alphabet after profit miss, ad slowdown and high spendingNY PostGoogle parent Alphabet tumbles after profit disappoints, warns AI is battering its cash flowIrish TimesAlphabet stock sinks as search woes cause revenue miss
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