Tech & AI
Alphabet tumbles after hours as quarterly results miss estimates
Alphabet's Class A shares tumbled 10.0% after hours Wednesday. Third-quarter revenue and earnings missed analyst estimates, though sales still grew and the cloud unit expanded quickly.
Quick Read
- Alphabet's Class A shares fell 10.0% after hours Wednesday following its third-quarter report.
- Revenue and earnings fell short of analyst estimates, though revenue still grew from a year earlier.
- Google Cloud grew fastest among the units the company reported.
- After-hours moves can shrink or reverse once regular trading opens Thursday at 9:30 a.m. ET.
How far did Alphabet shares fall?
Alphabet's (Nasdaq: GOOG) Class A shares tumbled 10.0% in after-hours trading Wednesday, to $292.50. The Class C shares, which carry no voting rights, fell 9.7%.
Why it matters: After-hours trading runs after the regular session ends. Fewer buyers and sellers take part, so a handful of large orders can move prices more than usual.
By the numbers: The drop followed a calm day. The Class A shares rose 1.3% in regular trading to close at $324.89. Even at that close, the stock sat 19.3% below its 52-week high of $402.62.
What did Alphabet report?
The Google parent released its third-quarter results after the closing bell. Revenue and per-share earnings both came in below analyst estimates, according to reports.
Sales still grew from the same quarter a year earlier. Search, YouTube advertising and Google Cloud all posted gains. Google Cloud, which rents computing power and software to businesses, grew fastest of the units the company reported separately.
Chief executive Sundar Pichai credited artificial intelligence for growth in search. "Our AI investments are driving overall Search query growth, including commercial queries," he said.
Could the reaction change, and what comes next?
What’s next: The earnings miss may be less clear-cut than it looks. Reports noted that the per-share figure may not compare directly with the analyst estimate.
After-hours moves often shrink or reverse once the full market opens. Regular trading resumes at 9:30 a.m. ET on Thursday, Oct. 29, when far more investors can weigh in.
Management scheduled a call with analysts for 4:30 p.m. ET Wednesday to discuss the quarter. Thursday also brings the advance estimate of third-quarter GDP at 8:30 a.m. ET, which could move the wider market. GDP, or gross domestic product, is the broadest gauge of U.S. economic output.
For readers
What it could mean for you: People who own Alphabet shares directly feel this report in full, with no other holdings to soften it. The after-hours price is an early reading from a thin market, and Thursday's opening price may look different. Holders of S&P 500 index funds feel it far less, only in proportion to Alphabet's weight in the index. How investors balance fast cloud growth against the missed estimates could shape where the shares settle in the days ahead.
Questions and answers
Why did Alphabet stock fall after earnings?
Alphabet's third-quarter revenue and per-share earnings came in below analyst estimates, according to reports. The Class A shares tumbled 10.0% in after-hours trading Wednesday.
Did Alphabet's revenue grow in the third quarter?
Yes. Revenue rose from a year earlier, with gains in search, YouTube advertising and Google Cloud. Cloud posted the fastest growth of those units.
Are after-hours stock moves final?
No. After-hours trading is thin, so prices can swing more than usual. Such moves often shrink or reverse once the full market opens at 9:30 a.m. ET.
The numbers
| Alphabet (GOOG) price | $321.89 |
|---|---|
| Alphabet (GOOG) change | +1.60% |
| Alphabet (GOOG) market value | $1.8 trillion |
| Alphabet (GOOG) 52-week high | $399.04 |
| Alphabet (GOOGL) price | $324.89 |
| Alphabet (GOOGL) change | +1.34% |
| Alphabet (GOOGL) market value | $1.9 trillion |
| Alphabet (GOOGL) 52-week high | $402.62 |
| S&P 500 change | +0.28% |
| 10-year Treasury yield | 5.05% |
Wednesday’s close
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