Alphabet shares tumble above 10% after $9.07B negative cash flow
Alphabet, Google's parent company, just saw its stock tumble more than 10% after-hours, thanks to a quarterly report that surprised everyone: the company posted a negative free cash flow of $9.07 billion, mainly from spending to boost cloud capacity and fund AI research.
This is the first time in Alphabet's history it's had two back-to-back quarters with negative cash flow.
Alphabet revenue misses as spending rises
Big spending on AI and cloud tech put pressure on profits: revenue came in at $127.6 billion, missing targets by a bit due to weaker ad sales.
Net income dropped 25% to $26.17 billion, and earnings per share fell short of analyst expectations ($2.67 vs. $3.02).
CFO Anat Ashkenazi flagged that hefty investments will continue into next year, but CEO Sundar Pichai tried to reassure investors by spotlighting their new Gemini 4 Carbon AI model and ongoing progress in AI tech.