Google Cloud revenue grew 103% last quarter, from $15.16B to $30.7B.

Google Cloud revenue grew 103% last quarter, from $15.16B to $30.7B. Alphabet shares still fell 9.5% after hours, to about $293.94 from a $324.89 close as of 5:10pm ET. That gap is the most interesting thing I saw in earnings tonight.

The headline miss was EPS. Adjusted EPS was $2.67 against a $2.97 estimate; GAAP EPS was $2.12. About $8.66B in investment losses cut $0.55 of that, and R&D climbed from $15.15B to $20.64B as Alphabet pours money into AI. Revenue came in at $127.6B, up about 25%, just under the $127.96B estimate. Free cash flow was negative $9.07B.

The part I'd watch is Search. Search & other brought in $63.35B versus the $64.96B analysts expected, and Search growth slowed to 12% from 17% the prior quarter. Sundar called it a strong quarter on a half-trillion dollar run rate, and the cloud number backs him up. The ad engine is what wobbled.

Minutes apart, Microsoft reported $92.3B in revenue, up 19%, adjusted EPS of $4.89 against a $4.72 estimate, and disclosed Azure in dollars for the first time: $33.17B, up 48%. MSFT was up 3.5% after hours. Same AI-capex story, same evening as a hawkish Fed hold (rates unchanged at 3.75%-4%, two dissents for a hike), opposite reactions.

My read is that investors will fund the AI buildout as long as the core business holds steady. Once search shows cracks, even a cloud business that doubled in a year doesn't seem to be enough.

Sources:
Bloomberg: https://www.bloomberg.com/news/articles/2026-10-28/microsoft-reports-quarterly-cloud-sales-that-beat-estimates
The Globe and Mail: https://www.theglobeandmail.com/business/article-microsoft-beats-quarterly-cloud-estimates-as-azure-revenue-grows-48/
TipRanks/TheFly: https://www.tipranks.com/news/the-fly/alphabet-reports-q3-eps-2-12-consensus-3-01-thefly-news

Not financial advice. For informational and educational purposes only.