Stock Market Update

[BRIEFING.COM] The major averages are little changed from their opening lines, with the Nasdaq Composite (-1.3%) bearing the brunt of today's tech-driven retreat, while rotational strength across the broader market keeps the S&P 500 (-0.3%) and DJIA (-0.3%) seated with more modest losses. 

Alphabet (GOOG 284.28, -37.61, -11.68%) is plunging more than 10% following its Q3 earnings report, weighing heavily on the Nasdaq Composite as concerns surrounding the enormous costs of AI infrastructure investment overshadow exceptional growth in its cloud business. The stock is approaching its 52-week low from October 29 2025 (268.43), and is down roughly 9.5% on a year-to-date basis.

Alphabet reported earnings of $2.12 per share, missing the $3.02 FactSet consensus, although investment losses accounted for $0.55 of the shortfall. Revenue increased 25% to $127.58 billion, roughly in line with expectations, while Google Cloud revenue surged 103% to $30.7 billion. However, Search revenue growth slowed to 12%, and the company's substantial infrastructure spending pushed quarterly free cash flow to negative $9.1 billion.

Alphabet maintained its FY26 capital expenditure outlook of $195-205 billion but signaled another significant increase in spending next year. The company also raised substantial debt and equity financing during the quarter, adding to concerns about the funding requirements and eventual returns on its AI investments. Meanwhile, management warned that increased reliance on third-party computing capacity could pressure cloud profitability in the coming quarters.

The disappointing reaction is contributing to broader weakness in technology stocks as investors reassess the costs associated with the ongoing AI infrastructure buildout.