Alphabet shares fall after revenue miss, cash burn worsens

Alphabet's shares fell by more than 10 percent in after-hours trading following a revenue and profit miss on Wednesday. The tech giant's AI spending accelerated its cash burn, which widened to $9.07 billion in the quarter, surpassing analysts' expectations of a near-even position. CFO Anat Ashkenazi said capital expenditures, driven by AI, would increase significantly in 2027, but the current quarter's capex forecast remained unchanged.

The company reported a $7.66 billion operating income loss and a 25 percent fall in adjusted earnings per share, both missing Wall Street targets. Despite a revenue of $127.6 billion, which fell short of the $128.2 billion estimate, Google Cloud's cloud revenue more than doubled to $30.71 billion, though it couldn't offset the ad-side performance.

The company's focus on AI development, as exemplified by the introduction of the Gemini 4 Carbon model, was aimed at keeping up with competitors.