Alphabet Set to Report Third-Quarter Earnings After Market Close

Alphabet is scheduled to release its third-quarter financial results after the market closes on Wednesday.

According to a consensus of estimates compiled by LSEG, analysts are forecasting:

• Earnings per share: $3.02
• Revenue: $128.2 billion

Revenue is projected to rise approximately 25% compared with the same period last year, which would represent the company’s fastest growth rate in any quarter since 2021.

The earnings release comes amid a cautious atmosphere on Wall Street, as investors increasingly weigh the substantial costs associated with Alphabet’s artificial intelligence infrastructure buildout.

Shares of the Google parent have declined in five of the last six trading sessions through Tuesday and are down roughly 7% during October. In July, the company raised its full-year capital expenditure forecast to a range of $195 billion to $205 billion, up from previous guidance of as much as $190 billion. The firm also reported negative free cash flow for the first time.

For the third quarter, analysts expect capital expenditures to surge roughly 130% year over year to $55.2 billion, according to FactSet. Annual capital spending is projected to exceed $200 billion and surpass $300 billion by 2027.

Meanwhile, analysts anticipate negative free cash flow of $2.27 billion for the third quarter, with the shortfall expected to deepen over each of the next four quarters.

As Alphabet increases spending to drive expansion, its cloud division—where its AI products are housed—is delivering revenue growth. Cloud revenue is forecast to climb about 90% to $28.7 billion as Google continues to gain market share from larger rivals Amazon Web Services and Microsoft Azure. Microsoft is also scheduled to report earnings on Wednesday, followed by Amazon on Thursday.

Google is actively integrating its Gemini models and services into enterprise products and accelerating sales of its custom tensor processing units (TPUs), which compete with Nvidia’s graphics processing units (GPUs). At the same time, the company’s core search business faces growing pressure from OpenAI and Anthropic, as well as a wave of new AI agents entering the market.

“Google continues to be well-positioned across AI,” analysts at Citizens, who maintain a buy rating on the stock, wrote in a report last week. “That said, execution risk exists, and we are incrementally cautious on Search as we believe competition is increasing with agents and requires another pivot.”

Company executives are set to host a conference call with analysts at 4:30 p.m. ET.

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