【Cloud business doubles, but stock falls nearly 10%】
Google $GOOGLB is growing its business bigger and bigger, yet shareholders are the ones getting spooked and heading for the exits. Q3 revenue was $127.6 billion, up 25% year over year. Google Cloud revenue hit $30.7 billion, doubling outright, while operating profit also grew 30%. There are clearly buyers for AI computing power, and the cloud business is already turning demand into real money.
The problem is that investment is so aggressive it’s becoming hard to sustain. Google spent $51.4 billion on capital expenditures in a single quarter, and free cash flow turned negative at $9.1 billion. Full-year capital expenditures are still expected to reach $195 billion to $205 billion, and management has also signaled another sharp increase in spending in 2027. Meanwhile, net income fell 25% year over year, mainly dragged down by around $8.7 billion in equity investment losses—not a sudden slowdown in the core business.
The market is worried that while AI revenue is growing fast, so are the bills for building data centers, buying chips, and supplying power. Cloud backlog has reached $561 billion, showing that demand is there, but fulfilling those orders and earning a return on investment will take time.
The stock fell nearly 10% after hours. It’s not that the market can’t see AI growth; it wants to know when this spending race will actually pay off. Google now has to prove that revenue growth can outpace capital expenditures. Otherwise, the hotter the cloud business gets, the more shareholders will have to pay upfront for the future.
#股票财报季 #Google $GOOGL
Google $GOOGLB is growing its business bigger and bigger, yet shareholders are the ones getting spooked and heading for the exits. Q3 revenue was $127.6 billion, up 25% year over year. Google Cloud revenue hit $30.7 billion, doubling outright, while operating profit also grew 30%. There are clearly buyers for AI computing power, and the cloud business is already turning demand into real money.
The problem is that investment is so aggressive it’s becoming hard to sustain. Google spent $51.4 billion on capital expenditures in a single quarter, and free cash flow turned negative at $9.1 billion. Full-year capital expenditures are still expected to reach $195 billion to $205 billion, and management has also signaled another sharp increase in spending in 2027. Meanwhile, net income fell 25% year over year, mainly dragged down by around $8.7 billion in equity investment losses—not a sudden slowdown in the core business.
The market is worried that while AI revenue is growing fast, so are the bills for building data centers, buying chips, and supplying power. Cloud backlog has reached $561 billion, showing that demand is there, but fulfilling those orders and earning a return on investment will take time.
The stock fell nearly 10% after hours. It’s not that the market can’t see AI growth; it wants to know when this spending race will actually pay off. Google now has to prove that revenue growth can outpace capital expenditures. Otherwise, the hotter the cloud business gets, the more shareholders will have to pay upfront for the future.
#股票财报季 #Google $GOOGL