Stocks
October 29, 2026
Apple Stock Gets $355 Target as Touchscreen MacBook Pro Debuts
- Alphabet Google Stock fell sharply despite record revenue as weaker-than-expected earnings and concerns over advertising growth weighed on investor sentiment
- Microsoft stock rallied on strong Azure growth and higher net income, highlighting investor confidence in its cloud business
- Alphabet earnings showed robust Google Cloud growth but raised concerns over AI spending, rising capital expenditures, and negative free cash flow
Google and Microsoft both have recently reported their earnings, however, the market sentiment around the two stocks has been different. Alphabet, Google’s parent company, generated nearly $127.6B in revenue for Q3 2026, while Microsoft reported $92.3B for its fiscal first quarter. Despite this, Alphabet stock (GOOGL) crashed after hours, while Microsoft stock gained as much as 6%. The difference between the two revenue reports appears deeper than it looks. Let’s explore the differences in detail.
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Why Google Stock Plunged Despite Record Revenue
Alphabet’s third-quarter revenue has risen 25% YoY to $127.6B. However, it was not enough for Google stock to remain steady in the market. First and foremost, the earnings came below investors’ expectations of $128.2B. Earnings per share also ended up missing forecasts, with net income falling 25% to $26.17B.
At the same time, Google’s core offering, which is its search revenue, also showed slower growth, rising 12% to $63.4B. Advertising revenue also missed its expected forecast, with investors questioning whether AI-powered search tools could change the way people find information. This change ended up impacting the Google stock trajectory.
Despite the weaker-than-expected results, Google Cloud reported robust numbers. Its revenue more than doubled to $30.7B, supported by AI infrastructure and cloud services. But this aspect alone was not helpful in uplifting Google stock overall.
AI Spending Pressures Google Stock
In addition to this, Alphabet spent nearly $51.4B in capital expenditures during Q3 2026. The money was directed toward investments in data centers, computing capacity, and AI infrastructure. Its free cash flow turned negative at around $9.1B, further pressuring the stock. The company further expects capital expenditure to hit new highs in 2027 as it continues to expand its AI operations.
Investors are largely skeptical about Google’s AI spending and whether the huge capital spending can be translated into higher profits in the near future.
Microsoft Stock Rallies on Azure Growth
On the other hand, Microsoft stock has performed extremely well compared with Google. Its quarterly revenue increased by 19% YoY to $92.3B. The company’s net income rose 32% to $36.6B. Microsoft further reported strong growth in its cloud business, which ended up aiding its stock.
Microsoft Azure revenue has been the highlight of this surge. The firm reported $33.2B for the quarter, up 48% from a year earlier. Moreover, Microsoft’s commercial remaining performance obligation rose 73% to $677B, reflecting contracted revenue that the company expects to recognize in the future.
According to the MarketCapOf ROI comparison tool, Alphabet Google Stock (GOOG) increased 1.02x, while Microsoft stock (MSFT) rose 1.12x between January 1 and October 29, 2026. The comparison comes as Alphabet earnings highlight strong Google Cloud growth alongside concerns over AI spending and its impact on profitability. Meanwhile, Microsoft’s stock performance reflects investor interest in its cloud business and AI growth opportunities.
This contrast shows how AI spending is helping companies generate steady revenue. However, investors remain concerned about whether these investments will translate into meaningful revenue growth in the near future.
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