ONE BIG THINGAI is costing Big Tech more money than it earns—and Wall Street hates it
Alphabet made history on Wednesday, booking its most profitable quarter in corporate history—$112 billion in profit, the first 12-figure quarterly profit in history. Revenues in Google’s cloud computing business, the core of the company, soared 82%.
So why did investors punish Alphabet, sending its shares down nearly 7%, the worst day since tariffs?
Because for the first time in the company’s history, Alphabet became cash flow negative, Fortune’s Eva Roytburg reports. On page 12 of its earnings presentation, Alphabet revealed that it was spending more on property and equipment than it was taking in from its operating activities, leaving it with $5.9 billion in negative free cash flow.
At least six firms cut their price targets for Alphabet in response, including Piper Sandler (to $395), UBS (to $379) and D.A. Davidson, whose $350 target was one of the most bearish on the Street.
