Alphabet Inc.

Alphabet's Q3 2026 revenue rose 25% to $127.6 billion, driven by Google Cloud revenue more than doubling (+103% to $30.7 billion) and Google Services growing 11%. Operating income rose 30% to $40.6 billion, but net income fell 25% to $26.2 billion because other income swung to a $8.2 billion loss from unrealized equity losses, largely SpaceX. The company is funding a very large AI infrastructure build-out with debt, equity and preferred issuance, with capex of $132.0 billion in nine months and $924.4 billion of purchase commitments.

1. 1.Google Cloud revenue grew 103% to $30.7 billion and its operating income rose to $11.1 billion from $3.6 billion, helped by TPU system sales and the Wiz acquisition (closed March 2026 for $29.5 billion); revenue backlog reached $567.7 billion, of which $560.8 billion is Cloud.
2. 2.Other income (expense) swung to a $8.2 billion loss in Q3 from $12.8 billion income a year earlier, mainly net unrealized losses on marketable equity securities (largely SpaceX), cutting Q3 net income per diluted share to $2.12 from $2.87 despite higher operating income.
3. 3.Capex was $132.0 billion for nine months versus $63.6 billion a year earlier ($51.4 billion in Q3); long-term debt rose to $125.1 billion from $46.5 billion, total assets reached $1.0 trillion, and no shares were repurchased versus $39.8 billion in the prior-year nine months.
4. 4.The company raised new equity in 2026: $20.5 billion public offering and $10.0 billion Berkshire Hathaway private placement of common stock, $19.0 billion of 6.25% mandatory convertible preferred, and a $40 billion at-the-market program ($12.4 billion used so far).
5. 5.Commitments grew sharply: $924.4 billion of material purchase commitments ($213.4 billion due within 12 months), $130.5 billion of leases not yet commenced, and $75.7 billion of data center backstops plus $22.8 billion of financial guarantees; a related-party joint venture, Crux AI, was formed with a $16.8 billion backlog contract.
6. 6.Legal developments: the Android EC fine was paid ($5.2 billion), the EU Digital Markets Act fines totaled $1.0 billion in Q3, a $2.1 billion PriceRunner damages award was recognized in Q2, and the ad tech remedies decision in September 2026 denied structural divestiture in favor of behavioral remedies.

1. 1.New or expanded risk factor on capital market access and indebtedness: leases, backstops, guarantees, large commercial agreements and equity dilution could raise financing costs and reduce flexibility.
2. 2.Large long-term supply, energy and lease commitments, plus backstops and TPU repurchase obligations, could leave excess capacity or inventory and create significant liabilities if counterparties or customers fail to perform.
3. 3.Dilution risk from the $40 billion ATM program and conversion or share-settled dividends of the mandatory convertible preferred stock, which could depress share prices; repurchases are not guaranteed and none occurred in 2026.
4. 4.Expanded AI risks: autonomous AI agents acting outside intended scope, errors compounding across multi-step workflows, and AI-accelerated cyberattacks and vulnerability exploitation.
5. 5.Antitrust and regulatory exposure: Search remedies (data sharing, distribution limits) under appeal, ad tech behavioral remedies, EU DMA fines, and private damages claims, with $13.8 billion of accrued fines and settlements.
6. 6.Earnings volatility from large equity holdings: Q3 other income was a $8.2 billion loss, and $128.2 billion of non-marketable securities are concentrated primarily in one private company, with $75.2 billion of SpaceX shares subject to short-term sale restrictions.