Alphabet grows strongly, but investors recoil at profit slump
Google parent Alphabet saw revenue rise sharply, but earnings per share fell well short of expectations.
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Alphabet, Google’s parent company, recorded significantly higher revenue in the third quarter of 2026. Yet its shares fell sharply on Wednesday after earnings per share came in below analysts’ expectations.
Alphabet reported revenue of 127.6 billion dollars for the period from July to September. That is 25 per cent more than in the same quarter a year earlier. The company said this was the thirteenth consecutive quarter of double-digit revenue growth.
Net income came to 26.2 billion dollars. Earnings per share were 2.12 dollars, compared with 2.87 dollars a year earlier. According to market data cited by Reuters, analysts had expected an average of about 3.02 dollars per share.
Google Cloud grew particularly strongly. Revenue from the cloud division more than doubled to 30.7 billion dollars, an increase of 103 per cent year on year. Alphabet attributed the growth to demand for infrastructure and services for artificial intelligence.
The core businesses also continued to grow. Revenue from Google Search and other search services came to 63.4 billion dollars, compared with 56.6 billion dollars a year earlier. YouTube advertising generated 11.2 billion dollars, compared with 10.3 billion dollars in the third quarter of 2025.
The figures therefore show two sides of the company. Demand for cloud capacity and AI services is rising rapidly, but the advertising business remains the main source of revenue. Some parts of that business in particular fell short of investors’ expectations.
Alphabet also reported that operating income rose by 30 per cent to 40.6 billion dollars and that the operating margin was 31.8 per cent. According to Alphabet, the lower net income was partly caused by a much less favourable result from activities outside ordinary operations than a year earlier.
Investors focused mainly on the combination of lower earnings per share and the high costs associated with AI infrastructure. Alphabet shares fell by about 6.5 per cent on Wednesday, according to Reuters. That is a market reaction, not evidence that underlying cloud growth has disappeared.
For Dutch companies, the result is mainly relevant as a signal for the broader market for cloud services, digital advertising and AI infrastructure. The figures confirm strong demand, but also make clear that revenue growth does not automatically lead to higher profits.
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Fact-check Approved · Nour Haddad — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The financial figures correspond to Alphabet’s quarterly publication. The market reaction and analysts’ expectations were checked separately; interpretations are presented as market analysis.
- confirmed Alphabet achieved revenue of 127.6 billion dollars in the third quarter of 2026, 25 per cent more than a year earlier. — Alphabet reports revenue of 127.577 billion dollars and 25 per cent growth. source
- confirmed Net income was 26.2 billion dollars and earnings per share were 2.12 dollars. — These amounts appear in Alphabet’s key financial figures. source
- confirmed Google Cloud grew by 103 per cent to revenue of 30.7 billion dollars. — Alphabet reports revenue of 30.709 billion dollars and 103 per cent growth. source
- confirmed Alphabet shares fell by about 6.5 per cent on Wednesday. — The market publication reports a 6.5 per cent decline on 28 October 2026. source
- confirmed Analysts expected earnings per share of about 3.02 dollars. — The stated consensus appears in the Reuters-based market publication. source
Editor's note
The quarterly figures and the market reaction were confirmed by Alphabet and an independent market publication. Analysts’ expectations are presented as expectations; no long-term conclusion has been drawn from the share-price decline.Sources
- Alphabet Announces Third Quarter 2026 Results — Alphabet Inc.
- Alphabet shares tumble 6.5% as earnings miss overshadows cloud boom — Investing.com / Reuters
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