Alphabet Heads for Record Post-Earnings Plunge
Weak free cash flow and a soft search business sent Alphabet shares down more than 10 percent before Thursday’s open, even as Microsoft climbed on stronger cloud results.
Market Snapshot
All figures are indicative opening levels as of this morning, October 29.
Stocks pointed to a mixed open Thursday, with the Dow around 52,475.10, up 0.19 percent, the S&P 500 around 7,743.98, up 0.28 percent, and the Nasdaq around 26,549.85, up 0.27 percent.
Gold eased to around $4,038.60, down 0.32 percent, and silver slipped to around $52.85, down 1.51 percent, while oil fell to around $101.38, down 1.36 percent, on demand concerns.
The VIX ticked up to around 17.12, up 1.24 percent, as a wave of megacap earnings reactions overshadowed the broader market’s modest gains.
Alphabet’s earnings reaction is dominating the stocks in the news today.
Alphabet tumbled to around $291.49, down 10.28 percent, after a third quarter miss and negative free cash flow, Microsoft rose to around $545.56, up 2.74 percent, on stronger cloud results, and ServiceNow dropped to around $121.70, down 18.79 percent, despite raising its long-term AI revenue targets.
Main Story
Alphabet’s earnings miss is set to overshadow an otherwise solid night for Big Tech.
- Alphabet reported earnings per share of $2.12 against estimates near $3.02, with free cash flow swinging negative at roughly negative $9.07 billion.
- Analysts described Microsoft’s results as measured and disciplined, while calling Alphabet’s earnings call messier, with cloud strength doing little to offset concerns about cash burn and search growth.
- Google Cloud revenue grew roughly 103 percent with improving profitability, a detail some investors may be overlooking amid the broader selloff in Alphabet shares.
Chart of the Day
Alphabet shares traded around $291 in premarket action Thursday, putting the stock on pace for one of its steepest post-earnings declines since its 2004 initial public offering.
The drop pushed shares well below both the stock’s 50-day average near $327 and its 200-day average near $342, erasing weeks of gains in a single session.
Traders are watching whether Google Cloud’s growth and profitability can eventually stabilize sentiment or whether concerns about free cash flow and search keep pressuring the stock in the sessions ahead.
Technical Trading
GOOGL levels from Wednesday’s technical summary, ahead of Thursday’s earnings reaction.
- The 14-day RSI read around 54.78 heading into the print, a neutral reading that offered no warning of the scale of Thursday’s move.
- MACD sat around negative 0.311, already leaning bearish before results, consistent with the stock’s recent softness.
- Classic pivot support near $323.34 gave way immediately in premarket trading as shares gapped well below prior technical levels.
Global News
- The Pentagon removed Lt. Gen. Brett Sylvia from his post amid heightened tensions with Iran, adding a new layer of uncertainty to an already tense standoff.
- Israel’s political deadlock deepened as Benjamin Netanyahu and Gadi Eisenkot both maneuver for position ahead of potential elections.
- Samsung Electronics shares fell nearly 5 percent despite reporting record quarterly profit, as investors focused on spending plans over the headline beat.
- The European Union moved to ratify a $105 billion loan package for Ukraine, a deal that lifted European defense stocks overnight.
- Oracle shares extended Wednesday’s 10.73 percent rally after the company laid out ambitious fiscal 2030 revenue targets at its investor day.
Texas News
The Texas Stock Exchange continued its October rollout, with Energy Transfer, Dillard’s and Texas Capital Bancshares among the first listings representing roughly $84 billion in combined market value.
The launch marks a notable step in Texas’s push to build out its own capital markets infrastructure.
Looking Ahead
Thursday, October 29: Amazon reports earnings after today’s close, closing out the week’s run of megacap results following Alphabet, Microsoft and ServiceNow.
Friday, October 30: Markets get their first full session to digest this week’s wave of earnings reactions, with Alphabet’s selloff likely to remain in focus.
The Y’all Street Podcast
Evan talks with Wasif Latif, Co-Founder and CIO of Sarmaya Partners, about his “Return to Tangibles” thesis: markets shifting from tech and long-duration financial assets toward energy, metals, commodities, and infrastructure. They cover what’s changed since the 2008 financial crisis, and frame AI as much a physical infrastructure story (power, natural gas, copper, uranium) as a software one. Latif ties it back to how he’s positioning around that view through Sarmaya’s LENS ETF.
Prices from Yahoo Finance, CNBC and Fortune. Technical levels from Investing.com and FXStreet. News from Reuters, Al Jazeera and CNBC.
For informational purposes only. Not investment advice. Prices are indicative opening levels and may differ from your broker.
