Google's parent posted 25% sales growth and a blowout cloud quarter, but a paper loss on SpaceX, record spending and negative cash flow spooked investors.
Why did Alphabet stock drop after its third-quarter report?
Alphabet (GOOGL, GOOG) reported third-quarter revenue of $127.6 billion on Wednesday, Oct. 28, 2026, up 25%, slightly below forecasts. Earnings fell to $2.12 a share, well under the roughly $3.01 analysts expected, partly because of an investment loss tied to SpaceX. The stock fell about 9% to 10% after hours.
Alphabet released the results shortly after the 4 p.m. Eastern close, according to its third-quarter earnings release. The Class C shares (GOOG) had closed at $321.89, up 1.6% on the day. MarketBeat showed them at $290.54 in extended trading at 8 p.m. Eastern, down 9.7%, while StockTitan reported the Class A shares (GOOGL) down 9.4% shortly after the release.
Revenue came in just under the $127.9 billion consensus that Fortune cited from S&P Global Visible Alpha. The bigger gap was in profit.
What happened to Alphabet's profit?
Net income fell to $26.5 billion from $35.0 billion a year earlier, and earnings per share dropped to $2.12 from $2.87. The main reason was outside Google's core businesses. Alphabet booked an $8.7 billion loss on equity securities, the stakes it holds in other companies. The company said that loss cut net income by $6.7 billion after taxes, or 55 cents a share.
On the earnings call, Chief Financial Officer Anat Ashkenazi said the loss came "primarily" from an unrealized loss on Alphabet's investment in SpaceX after a decline in SpaceX's stock price, according to MarketBeat's call transcript. "Unrealized" means Alphabet still owns the stake. It is a paper loss, not cash out the door, but it still counts in reported earnings.
The underlying business looked healthier. Operating income, the profit from running the company…
Unlock the full analysis
See the weekly membership price and unlock the full analysis.
See weekly checkoutSee all plansAlready a member? Sign in
Content on The Evergreen Edit is for educational and informational purposes only and is not individualized financial, investment, tax or legal advice. Learn more.
Compound growth estimate
Estimated total
$17,175
Your contributions
$13,000
This is an estimate, not a prediction. Monthly compounding; taxes, fees and inflation are excluded.
This article is for educational purposes only and isn't personalized financial, tax or legal advice. Consider talking with a qualified professional about your situation.
Kiara Miller — Founder & Editor
Kiara Miller is the founder and editor of The Evergreen Edit. He has been doing independent finance research for two decades and reviews every article before it's published.
More about Kiara →Get smarter about your money.
Join readers who get money stories on their chosen topics, daily or as new articles post.
