🔍 Street Takeaways - Alphabet Q3 Earnings ($287.71 -$37.18) Overview: • Shares (11.4%). Revenue +24.7% y/y missed by (0.3%). Services missed on the top line as Ads were below by (1.9%) while Cloud mitigated beating by 6.9%. • GAAP operating margin on gross revenue (210bps) y/y missed by (190bps); OM on net revenue +80bps y/y and below by (230bps). FCF ($9.07B) was ($6.37B) below consensus. • Full-year 2026 CapEx guidance remains $195B-$205B with significant increase expected in 2027. • Analysts were mixed following the print. Slight miss in the quarter was attributed to deceleration in Search more than offsetting GCP revenue +103% y/y. Those leaning more hesitant feel pending transition to agentic experience presents material execution risk for search monetization. Others more positive call out multiple reasons for Buy including AI platform development, rather than new products, and competition for compute maximizing ROICs on Capex. RSI investment and cadence of innovation across AI stack also cited underscoring constructive views. $GOOG $GOOGL #Google# #Earnings# #TechEarnings# #Tech# #GoogleCloud# #FCF# #EPS# #GCP# #GoogleSearch# #CloudRevenue# #AI# #AgenticAI# #Capex# #CloudComputing# #FinTwit# Gain immediate access to earnings insights with #StreetAccount#:

StreetAccount Wednesday morning check-in: • AI trade outperforming again with heightened focus on favorable fundamental backdrop highlighted by earnings. SK Hynix the highlight following a big beat and comments about LTAs with 14 major customers covering 50%+ of its production capacity for 2027 and 2028, along with expectations for memory demand to outpace supply through 2030 (and $75B capital return). While AI earnings read-throughs were upbeat elsewhere in tech, some focus on a high bar. Renewed divergence between AI trade and breadth another area of scrutiny (one of the takeaways from Tuesday's trading). Oil strength the other big story today with report White House has told Gulf allies to prepare for a possible short-but-intense military campaign against Iran after the midterms. However, this has already been the consensus view (and oil has repriced for kinetic risk in recent weeks). FOMC meeting this afternoon increasingly framed as a likely non-event for stocks, while market much more interested in earnings from Microsoft and Google after the close (and Amazon the next day). Cloud revenue/backlog growth the key area of focus amid the myriad moving pieces surrounding capex and monetization dynamics. $MSFT $AMZN $GOOGL #SkyHynix# #MarketUpdate# #AI# #Equities# #Markets# #AIInfrastructure# #Memory# #HBM# #CloudComputing# #Capex# #Monetization# #CloudRevenue# #TechEarnings# #Earnings# #Oil# #Iran# #MiddleEast# #FOMC# #WhiteHouse# #Fed# #InterestRates# #FinTwit# Gain immediate access to unparalleled insights with #StreetAccount#:

Cloud revenue growth this quarter has been INSANE. $NBIS went from $105M in revenue a year ago to $582M this quarter. (+454% YoY) Adjusted EBITDA flipped with it, negative $21M last year to positive $236M now. $CRWV did $2.58B with $1.5B of adjusted EBITDA. None of this should surprise anyone who listened to the hyperscaler calls last month. $GOOGL Cloud grew 82% to about $25B. $MSFT Azure grew 43% and crossed $100B for the fiscal year. $AMZN has AWS running near $169B annualized and their AI and chips businesses each cleared $25B, both more than doubling. Four largest cloud businesses in the world and all of them are speeding up. The overflow goes to whoever has capacity. Right now that is $NBIS and $CRWV.

Google Cloud revenue more than doubled in Q3, while Search advertising continued to grow. Equity investment losses pulled Alphabet’s earnings lower, and higher capital spending left free cash flow negative for a second straight quarter. Alphabet reported revenue of $127.6 billion, up 25% from a year earlier, and operating income of $40.6 billion, up 30%. Net income available to common shareholders fell 25% to $26.2 billion, while diluted EPS declined 26% to $2.12. Google Cloud revenue grew 103% to $30.7 billion, accelerating from 82% growth in Q2. Segment operating income reached $11.1 billion, with its operating margin rising to 36.2% from 23.7% a year earlier. Based on the reported figures, Cloud accounted for about 62% of Alphabet’s year-over-year revenue increase. Alphabet cited strong demand for enterprise AI infrastructure and solutions. TPU system sales also contributed meaningfully to growth, so Cloud’s revenue includes hardware sales alongside cloud services. Search and other revenue rose 12% to $63.4 billion, slowing from 17% growth in Q2. YouTube ad revenue increased 9% to $11.2 billion. Management said the year-over-year growth rate in Search queries was its highest in five years, with AI also driving commercial queries. How effectively Google turns that additional usage into advertising revenue remains an open question. The decline in earnings largely reflected equity investment losses of $8.7 billion, compared with gains of $10.7 billion a year earlier. Alphabet said this quarter’s losses reduced EPS by $0.55. These investment results include both realized and unrealized gains and losses. Group operating margin was 31.8%, down from 34% in Q2. Operating cash flow reached $42.3 billion, while capital spending jumped 114% year over year to $51.4 billion. Free cash flow fell to negative $9.1 billion from negative $5.9 billion in Q2, though the trailing 12-month total remained positive at $19.7 billion. Alphabet also raised $12.4 billion through its at-the-market common-stock program and $28.7 billion from senior unsecured notes, both net of issuance costs. It repurchased no shares during the quarter. When it announced the ATM program in Q2, the company said the proceeds were primarily intended to cover tax obligations tied to employee equity grants. Alphabet-level activities recorded an operating loss of $7.7 billion, primarily reflecting shared AI research and development. Cloud’s 36.2% segment margin excludes those shared costs.

GOOGLE CLOUD REVENUE $30.71 BLN, ABOVE ESTIMATE OF $29.1 BLN AND UP 103%, WHILE GOOGLE SERVICES REVENUE $96.30 BLN AND SEARCH & OTHER REVENUE $63.35 BLN BOTH CAME IN BELOW ESTIMATES, WITH YOUTUBE ADS REVENUE $11.21 BLN

Microsoft’s cloud growth accelerated in the September quarter, but a sharp rise in capital spending squeezed free cash flow. Revenue rose 19% year over year to $92.3 billion, while operating income increased 21% to $45.9 billion. Microsoft Cloud revenue grew 30% to $63.9 billion, led by 48% growth in Azure. Cash spending on property and equipment more than doubled to $39.4 billion. Subtracting that from $58.0 billion in operating cash flow leaves about $18.6 billion in free cash flow, down 27% from a year earlier. The cash-spending figure excludes finance leases. The 32% increase in reported EPS also needs context. OpenAI investment losses weighed on last year’s earnings, while gains helped this quarter. Excluding those effects in both periods, EPS rose 18% to $4.89, compared with reported EPS of $4.92. Commercial remaining performance obligations climbed 73% to $677 billion, representing contracted revenue still to be recognized. Consumer businesses were weaker: Windows OEM and Devices revenue fell 22%, while Xbox content and services declined 2%. Microsoft also changed its segment structure and reporting definitions this quarter, so historical comparisons should use recast figures.

$GOOGL Google Cloud revenue doubled. $30.7B, up 103%, with a 36.2% operating margin, up from 35.6% in Q2. Alphabet revenue $127.6B, up 25%. Operating income $40.6B, up 30%. EPS $2.12, down from $2.87, after an $8.2B other-expense loss. Capex $51.4B, below the $57–62B a quarter the full-year guide implies. Free cash flow -$9.1B.