The Zhitong Finance App learned that on Thursday, Google (GOOGL.US) opened sharply lower. As of press release, the decline was over 12%, and the market value evaporated by more than 400 billion US dollars, falling back to 3.5 trillion US dollars. According to the news, Google's parent company Alphabet released its financial report for the third quarter of 2026. Revenue and profit fell short of market expectations, and free cash flow was negative for the second consecutive quarter. The strong expansion of the cloud business makes it difficult to hide the fatigue of search advertising and the continued deterioration of free cash flow, and the market's doubts about whether huge AI capital investment can be converted into real returns have suddenly heated up.

According to the three-quarter report, Alphabet's total revenue was US$127.58 billion, up 25% year over year, lower than the average analysts' estimate of US$128.22 billion; earnings per share were US$2.12, which fell far behind Wall Street's expectations of US$2.99 to US$3.02.

J.P. Morgan lowered Alphabet's price target from $425 to $375. Goldman Sachs also lowered its target price for 12 months, from $435 to $385, a decrease of about 11.5%, but kept the purchase rating unchanged. Based on Goldman Sachs's closing price of $324.89 on October 28, the new target price corresponds to an upward margin of about 18.5%.

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