Schwab Network on $GOOGL (Oct 29, 2026)

Yeah, we are seeing a breakdown down over 11%. Now, the company actually had several different areas of weakness. It did actually miss both on revenue as well as the adjusted earnings per share. revenue came in at $127.6 billion.

Street was looking for 127 127.9 billion and Sund Pashai did say that now over half a trillion dollars in annualized revenue. Run rate is pretty much on the radar right now. The adjusted earnings per share came in at a $267.

Three Street was looking for $32. Well, net income did uh miss. That was actually down by 25% on a year-over-year basis. The advertising revenue once again a little bit of a shortfall coming in at $82.01 billion.

Street was looking for 83.4 billion, but the cloud revenue was the standout positive for this quarter coming in at an increase of 103% on a year-over-year basis. Now, the free cash flow did also come in negative, and this is the second quarter in the row.

Free cash flow came in negative 9.07 billion. Last quarter came in negative at $5.9 billion.

Now unfortunately you are seeing the ad business or the search business kind of uh seeing some weakness and it's not so much demand for search actually talked about that year-over-year search uh query growth was the highest that they've seen in 5 years but it's the monetization of that growth a lot of that those queries are going through the AI mode that is provided by Google Alphabet and unfortunately there is some ads within AI mode but not that many and they do not have it rolled out on the international front which is once again impacting their revenue.

So you can make the case that is AI kind of cannibalizing their business in some respects. It is but it also is acknowledging that they uh need to continue to integrate the uh AI mode within their within their business mix here in order for them to be uh profitable or to be able to uh give some confidence to the street that they're not losing their market share.

the TPU system sales continues to actually drive and be a meaningful driver for overall revenue and they are actually expecting that cloud revenue or that cloud backlog sitting at around $561 billion right now that 55% of that can be recognized over the next 24 months.

So obviously search a negative ad revenue a little bit of a negative here but they are seeing some positive when it comes to cloud as well as the TPU business.

Unfortunately, you are seeing the shares move to the downside once again about 11 and a quarter percent this morning. And technically speaking, we have now kind of broken the uptrend that we've seen over the last year.