Google stock (GOOG) fell 13.18% to $279.47 within minutes of Thursday’s open, a drop of $42.42 a share that strips roughly $522 billion from a market value now at $3.44 trillion. The fall came the morning after Alphabet reported third-quarter revenue of $127.58 billion, up 25%, and cloud revenue of $30.71 billion, up 103%.
Neither of those growth rates is what the market traded on Thursday morning. Diluted earnings came to $2.12 a share against consensus near $3.02, and the gap sits almost entirely in one line of the release that has nothing to do with search, advertising or cloud.
Google Stock (GOOG) Fell on an $8.7 Billion Unrealized Loss Tied to SpaceX
Alphabet’s third-quarter release puts other income and expense at negative $8.22 billion, against positive $12.76 billion a year earlier. Inside it is a net loss on equity securities of $8.66 billion, where the same line produced a $10.73 billion gain in the third quarter of 2025. The swing cut net income by $6.7 billion after a $1.9 billion tax offset, and took $0.55 off diluted earnings per share.
Chief financial officer Anat Ashkenazi named the holding on Wednesday’s call with analysts. Other income and expense was negative, she said, “due primarily to unrealized loss from our investment in SpaceX.” Alphabet has disclosed neither a share count nor an ownership percentage, though its second-quarter filing showed $80.0 billion of SpaceX shares under short-term sale restrictions. SpaceX shares drifted back toward their $135 listing price through the quarter, closing it at $150.86 against $170.86 three months earlier, and Alphabet marks the position to that price every quarter. Operating income was $40.58 billion, up from $31.23 billion, so nothing in the operating business explains why Google stock opened where it did.
Free Cash Flow Turned Negative $9.1 Billion on $51.4 Billion of Capital Expenditure
Capital expenditure reached $51.36 billion in the quarter, more than double the $23.95 billion of a year earlier, while cash from operations fell to $42.29 billion from $48.41 billion. Those two lines crossed, and free cash flow came in at negative $9.07 billion against positive $24.46 billion in the same quarter of 2025. On a trailing twelve-month basis it is down to $19.75 billion.
Operating cash flow fell by $6.1 billion year over year while capital expenditure more than doubled, which is the whole of the swing. Source: Alphabet third quarter 2026 earnings release · Chart: FinanceFeeds“We had negative free cash flow of $9.1 billion in the third quarter, driven by our investments in CapEx,” Ashkenazi said. Alphabet held the 2026 capital expenditure range at $195 billion to $205 billion and said spending will rise significantly in 2027, with a figure to come on the fourth-quarter call. Cash and marketable securities stood at $265.10 billion, so the burn is funded without borrowing, which separates Google stock from most of the sector running the same trade.
Investor Takeaway
The earnings miss is a mark-to-market loss on a listed holding, so Google stock fell on a line that reverses if SpaceX shares recover.
Cloud Grew 103% and the Backlog Reached $561 Billion, and Both Cost Cash
Google Cloud turned $30.71 billion of revenue into $11.12 billion of operating income, lifting its margin to 36.2% from 23.7%. Backlog reached $561 billion, with just over 55% of it expected to convert inside 24 months. Sundar Pichai said the company is “now on a half-trillion dollar revenue run rate,” and that the Gemini app has reached one billion users.
That backlog is also an obligation, because Alphabet has to buy the capacity to serve it before the revenue arrives. The same mechanics are running through the wider data center buildout, where CoreWeave and its neocloud peers borrow against contracted work and Oracle funds a $225 billion revenue target on bonds yielding above 8%. Alphabet is doing it out of cash, which is why the strain shows in the cash flow statement rather than on a bond screen. Ashkenazi flagged “margin headwinds in the near term as we utilize this capacity,” and said returns should stay “meaningfully above our cost of capital.” Search and other revenue grew 12% to $63.35 billion, and YouTube advertising 9% to $11.21 billion.
Google Stock Is Trading 8.8% Above the Bear Case Published on Tuesday
Our Google stock prediction published on Tuesday set a base case of $294.19 and a bear case of $256.83 off the $316.83 close, with the bear scenario tied to a further rise in capital expenditure guidance. Thursday’s open took the shares through the base case and to within 8.82% of the bear case in a single session, with 44 trading days still to run on that window.
Google stock (GOOG) has given up 25.97% over six months, and Thursday’s open accounted for half of that in one move. Source: TradingViewThursday’s move extends a decline that was already running for weeks before this print landed. Google stock is down 11.94% over five sessions, 17.35% over a month and 25.97% over six, and the price-to-earnings ratio has compressed to 16.54. KeyBanc kept its overweight rating on Thursday and cut its target to $385 from $410, and MSFT traded little changed at $531.03 across the same open after Microsoft held its own capital expenditure line. Alphabet employed 204,757 people at quarter end. The next report is due on 2 February 2027, which is when the 2027 spending figure arrives.
Investor Takeaway
Google stock at $279.47 sits below our $294.19 base case and 8.82% above the $256.83 bear case, reached on day one of a 45-session window.