This story was originally published on CIO Dive. To receive daily news and insights, subscribe to our free daily CIO Dive newsletter. Dive Brief: Google reaped the rewards of rising enterprise AI services demand during the third quarter, reaching $102 billion in revenues during the period ending Sept. 30, executives said during an earnings call Wednesday.  Cloud revenues soared in Q3 for the hyperscaler, growing 34% year over year to $15.2 billion. Google's cloud unit sustained profitability and brought ...

Alphabet (GOOGL) delivered stronger-than-expected third-quarter financials, sending GOOGL stock soaring more than 7% in pre-market trading. Notably, Alphabet delivered its first-ever $100 billion revenue quarter, as artificial intelligence (AI) has become the engine driving growth across nearly every part of the company’s business. From search and advertising to cloud computing, YouTube, and subscriptions, the company’s deep integration of AI technologies is paying off in a big way. Alphabet’s search busi ...

Core Insights - Alphabet reported better-than-expected third-quarter earnings with earnings per share of $2.87, surpassing the Zacks Consensus Estimate of $2.26 by 26.99% and showing a 35.38% improvement from $2.12 in the same period last year [1][2] Financial Performance - The company posted revenues of $87.47 billion for Q3 2025, exceeding the Zacks Consensus Estimate of $84.96 billion by 2.95%, marking a 17.33% increase from the previous year [4] - Net income surged by 32.99% year-over-year to $34.98 billion, while operating income increased by 9.49% to $31.23 billion [4] - Excluding a $3.5 billion EC fine, operating income jumped 22%, with margins expanding to 33.9% [5] Segment Performance - Google advertising revenues reached $74.18 billion, up 12.65% from the previous year, with YouTube ad revenues at $10.26 billion, reflecting a 15.02% increase [6] - Google Cloud business saw operating income rise to $3.59 billion, an 84.59% increase from $1.95 billion a year ago, with revenues growing 32.98% year-over-year to $15.16 billion [7] - Revenues from Google Services increased by 13.78% to $87.05 billion, with double-digit growth across Google Search & Other, YouTube ads, Google Cloud, and subscriptions [8] Stock Outlook - Alphabet has an average brokerage recommendation (ABR) of 1.40, indicating a strong buy sentiment, with 75.44% of recommendations classified as Strong Buy and 8.77% as Buy [9][10]

RT Mario Nawfal (@MarioNawfal)🇮🇱 ISRAEL FORCED GOOGLE AND AMAZON TO USE SECRET CODE TO BYPASS GLOBAL LAWSIsrael made Google and Amazon agree to a "winking mechanism" as part of their $1.2 billion cloud deal in 2021, dubbed "Project Nimbus".Here's how it works: if either company is legally forced to hand over Israeli data to foreign authorities and gagged from saying so, they must send a coded payment to Israel within 24 hours.The payment amount corresponds to the country's dialing code.US request? 1,000 she ...

Financial Performance - Alphabet's first $100 billion quarter with acceleration across every major business line [1] - Search up 14%, YouTube ads rose 15%, and Google Cloud jumped 34% year-over-year [2] - Stock up 38% over Q3, its biggest gain in 20 years [8] - Stock up 52% year-to-date, now approaching a $3.5 trillion market value [9] AI Strategy and Growth - CEO Sundar Pachai credited the beat to Alphabet's full stack AI strategy [2] - AI mode now has 75 million daily active users in the US with usage doubling over the quarter [3] - Gemini has 650 million monthly active users [3] - Google is testing ads inside AI mode [3] Cloud Business - Google Cloud's backlog surged to $155 billion, up nearly 80% from a year ago [3][4] - The number of billion-dollar cloud deals this year already exceeds the past two years combined [4] - Newly announced contract with Anthropic worth tens of billions of dollars [4] - Big wins with Meta, OpenAI, and others continue to validate Google's custom silicon approach [5] Capital Expenditure - Google is raising its full-year capex guidance to as much as $93 billion [5] - CFO flagging an even bigger step up coming in 2026 [5] - Alphabet Capex now $91 to $93 billion in 2025 and a significant increase next year [6]

Market Overview - The Dow Jones Industrial Average increased by 244.15 points (0.51%) to reach 47876.15, influenced by mixed corporate earnings and geopolitical developments [1] - The market narrative was shaped by Big Tech's quarterly reports and the outcomes of U.S.-China trade talks, alongside a cautious Federal Reserve stance on interest rate cuts [1] Corporate Earnings - Major tech companies reported earnings, significantly impacting market movements, with Alphabet (GOOGL) exceeding $100 billion in quarterly revenue for the first time [2] - Microsoft (MSFT) saw a decline of -3.45% after reporting high spending on cloud computing and AI tools, surprising investors [2] - Meta Platforms (META) shares fell due to planned spending for 2026 and a one-time tax charge, while investors await earnings from Apple (AAPL) and Amazon (AMZN) [2] Stock Performance - Salesforce (CRM) was the biggest gainer in the Dow, rising 2.45%, followed by Walt Disney Co. (DIS) with a 2.44% increase, and 3M Co. (MMM) up 2.22% [3] - Honeywell International Inc. (HON) was the largest loser, dropping -4.98%, with Boeing Co. (BA) declining -4.84%, and Microsoft (MSFT) also among the top losers [3] - The mixed performance highlights the market's sensitivity to individual company fundamentals within the tech sector and broader economic uncertainties [3]

Core Insights - Alphabet (GOOGL) shares reached a record high after reporting earnings that exceeded Wall Street estimates, with quarterly revenue surpassing $100 billion for the first time [1][8] Financial Performance - In Q3, Google Cloud revenue increased by 34% year-over-year, driven by significant investments in AI infrastructure and data analytics [2] - The legacy advertising business saw a 13% revenue growth, indicating stability in the digital ad market despite economic uncertainties [2] - The company raised its capital expenditure forecast for the year to between $91 billion and $93 billion, reflecting strong demand for AI [2] Stock Performance - Alphabet shares rose nearly 5% to around $288, with over 50% gains since the start of 2025, making it the top-performing stock among the Magnificent Seven [3] - The stock broke out from a flag pattern, suggesting a continuation of its strong uptrend, although the relative strength index indicates overbought conditions [5][8] Technical Analysis - The measuring principle suggests a potential upside target of $360 for Alphabet shares if the rally continues [8] - Key support levels to monitor are around $235 and $205 [8]

Core Insights - Meta's stock is experiencing a decline due to concerns over capital expenditure (capex) visibility and return on investment [1][3] - Alphabet's cloud backlog provides investors with confidence in correlating capex to revenue over the next one to two years [2] - Meta's AI investments are expected to take time to yield results, with a potential wait until the first half of the year for foundational model outputs [3] Meta Analysis - Meta's core business is expected to maintain a revenue growth rate of over 20%, driven by ad creation and monetization efforts [5] - The transformation of Meta AI into consumer and business-facing applications is seen as a critical medium-term goal [5] - Historical patterns indicate that Meta shares often react negatively to investment cycle discussions but tend to revert to market multiples over time [7] Alphabet Analysis - YouTube's advertising revenue has increased by 15% year-over-year, indicating strong performance amidst changing media ad spend [8] - The subscription revenue from YouTube is reportedly growing faster than its advertising revenue, suggesting a robust business model [10] - The combined revenue from YouTube ads and subscriptions is believed to be larger than Netflix and growing at a faster rate, highlighting Alphabet's competitive position [10]

Core Viewpoint - The article discusses the recent volatility in the stock market, particularly focusing on the significant drop in Meta's stock price following its earnings report, raising concerns about excessive capital expenditures in the AI sector and the potential for a bubble [2][5][10]. Financial Performance of Tech Giants - Major tech companies, including Alphabet, Meta, and Microsoft, reported a combined capital expenditure of approximately $78 billion in Q3, representing an 89% increase year-over-year. This spending is primarily directed towards data center construction and equipping them with GPUs and other devices [5][10]. - Meta's stock plummeted nearly 12% after its earnings report, attributed to unexpected high capital expenditures and warnings of significantly higher spending in 2026 compared to 2025 [5][9]. - In contrast, Alphabet's stock rose over 5% as investors reacted more favorably to its increased capital spending [5]. Market Sentiment and Concerns - Investors are increasingly questioning whether the substantial investments in AI by these companies are justified or if they indicate a bubble forming in the sector [2][5][10]. - Microsoft reported a record capital expenditure of $34.9 billion in Q3, which surprised investors and led to concerns about the return on investment in AI [10]. Federal Reserve's Monetary Policy - The Federal Reserve's potential interest rate cut in December is uncertain, with differing opinions among committee members. The likelihood of a rate cut has decreased from 90% to 67% according to CME data [4].

Core Insights - The earnings reports from Microsoft, Alphabet, and Meta reinforce the bullish investment thesis in AI, with significant capital expenditures expected to drive future growth [2][10][18] - Chipotle's recent earnings report was disappointing, highlighting challenges with younger consumers who are reducing spending, leading to a significant drop in its stock price [7][41][46] Company Earnings Analysis - Microsoft, Google, and Meta collectively spent $78 billion on capital expenditures in Q3, marking an 89% increase year-over-year, indicating a strong commitment to AI investments [10][12][18] - Alphabet's earnings report was particularly strong, exceeding expectations across various metrics, including cloud revenue and daily active users [18][22] - Meta's stock fell nearly 12% following its earnings report, as the company emphasized prioritizing AI infrastructure over short-term returns, which raised concerns among investors [6][28][30] Market Reactions - The overall market showed a negative trend, with major indices declining as investors reacted to the earnings reports and comments from the Federal Reserve regarding interest rates [3][4] - Chipotle's stock dropped over 19% after the company reported that younger consumers are pulling back on spending, which is a significant portion of its customer base [7][46] - Analysts expressed mixed feelings about Microsoft’s performance, suggesting it may present a buying opportunity despite some concerns about Azure growth [20][22] Economic Context - The unemployment rate for young people has risen to 9.2%, up from 7.9% a year ago, contributing to reduced spending among this demographic [46] - Inflation and rising costs are impacting consumer behavior, with companies like Chipotle unable to raise prices significantly without losing customers [54][55] Future Outlook - OpenAI is preparing for an IPO that could value the company at $1 trillion, but concerns about profitability and capital needs remain [56][60] - Microsoft is viewed as a safer investment compared to OpenAI, given its established market position and ongoing growth in cloud services [68]