Alphabet Lost About $450 Billion After Hours Even as Google Cloud Doubled
Google Cloud's profit roughly tripled and revenue hit record highs, yet Alphabet shareholders watched hundreds of billions in paper value vanish after hours. One number buried in the earnings report explains why investors sold anyway.
Alphabet (NASDAQ:GOOG | GOOG Price Prediction, NASDAQ:GOOGL) reported Google Cloud revenue rose 103% to $30.709 billion in the third quarter, yet lost about $390 billion in paper value after hours on Wednesday, Oct. 28, 2026.
The Class A shares closed at $324.89 after a 1.34% regular-session gain. They then traded at $292.50 around 7:59 p.m. ET, down 9.97%. The Alphabet Class C (NASDAQ:GOOG) shares are the same company without voting rights, and they fell 9.75% to $290.50 from a $321.89 close.
After-hours trading is thin, so this is a paper loss, and the regular session on Thursday, Oct. 29 sets the real move. You can size it two ways: share count times price, or reported market cap times the drop. Those methods put the loss between about $390 billion and about $396 billion.
Cloud Profit Roughly Tripled
Alphabet Inc. reported revenue rose 25% to $127.577 billion, and operating income climbed 30% to $40.576 billion. Alphabet Inc. said Search & other revenue grew 12% to $63.35 billion, so the core ad business held firm.
Alphabet Inc. said Cloud operating income about tripled to $11.121 billion from $3.594 billion. Chief Financial Officer Anat Ashkenazi said Cloud operating margin rose from 23.7% to 36.2%.
That means Cloud now helps pay for the expansion. Chief Executive Sundar Pichai said, “We had a strong quarter and are now on a half-trillion dollar revenue run rate.”
Why Investors Sold Anyway
Alphabet Inc. reported diluted EPS of $2.12, down from $2.87, missing the consensus estimate of about $3.01. A disclosed $8.7 billion loss on equity securities cut EPS by $0.55. That loss is a non-cash revaluation of Alphabet’s stakes in other companies.
Alphabet Inc. reported capex rose to $51.355 billion from $23.953 billion, and free cash flow, the cash left after paying for data centers and equipment, came in at negative $9.065 billion.
Ashkenazi said 2026 capex guidance of $195 billion to $205 billion remains unchanged. She added, “We continue to expect our CapEx to increase significantly in 2027.” When growth eats cash, the stock usually gets a lower multiple, because shareholders have to wait longer to get paid.
Microsoft Pulled Ahead After Hours
Microsoft (NASDAQ:MSFT) and Alphabet were essentially tied in market value at the close. After hours, Microsoft rose 2.90% on its own earnings to about $4.06 trillion, which put it clearly ahead by about $490 billion.
The after-hours GOOGL price sits below the end-2025 close of $312.39. That wipes out a 4% year-to-date gain inside a 52-week range of $266.50 to $408.61. For scale, GOOGL fell about 11.7% on Sept. 29, 2008, and 11.6% on March 16, 2020.
Regardless, Google’s backlog is strong. Ashkenazi said Google Cloud’s backlog was $561 billion. Ashkenazi expects just over 55% of it to turn into revenue within two years, so customers have already signed for much of the capacity being built. She also said “we started utilizing third-party compute capacity at the end of Q3 and will ramp usage in Q4,” and she expects that to weigh on Cloud margins in the near term.
What GOOGL’s Valuation Signals Now
A trailing P/E of 14x prices Alphabet Inc., which reported revenue growth of 25%, with Cloud profit about tripling, as if it were a slow grower. Negative free cash flow is the cost of filling a $561 billion backlog, and the 36.2% Cloud margin Ashkenazi cited shows the spending already generates returns. GOOG has the same economics at a slightly lower price, and the main difference between the classes is voting rights.
The main risk is that 2027 capex grows faster than the backlog turns into revenue. That would keep free cash flow negative for longer.
Check three things: Thursday’s regular-session close, the third-quarter 10-Q (not on EDGAR as of early Oct. 29) and the 2027 capex figure due at for the fourth-quarter call. If GOOGL closes below its $266.50 52-week low, the market is saying the cash drain outweighs the backlog, and the valuation case would weaken.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
