Alphabet shares fell 7% in after-hours trading on Oct. 28, 2026, after the company missed profit projections and spent more than $50 billion on AI in the third quarter. The spending renewed investor concerns that major cloud companies may not be generating enough revenue to support their infrastructure investments.
Microsoft shares moved higher after its cloud revenue beat estimates. A portfolio manager told Bloomberg that investors are favoring companies showing they can generate cash for shareholders.
Why it matters
For Alphabet investors, the earnings miss alongside heavy AI spending raises questions about whether the company can turn its infrastructure investment into enough revenue; the figures reported do not establish how quickly that may happen.
