Stock Market Today: Alphabet Stock Drops Sharply After Revenue Miss

Results from Google owner Alphabet and Microsoft have hit the tape, and investors are giving the tech giants mixed reviews.

Alphabet shares are slumping more than 10% in afterhours trading, which if it holds through tomorrow would be its sharpest drop in three years. The Google-parent reported revenue of $127.6 billion, short of the the $127.9 billion expected by analysts polled by FactSet.

The results give investors the latest window into whether the AI infrastructure buildout is paying off or reigniting jitters around AI spending.

Both Microsoft and Google are major suppliers of computing power for OpenAI and Anthropic, and revenue from each company’s cloud business is one of the most direct measures of how the tech giants are making money off the AI boom.

Microsoft’s Azure cloud business carried a big load of the company’s strong quarter; revenue from the unit that includes that business tallied $76.8 billion during the quarter.

At Alphabet, Google’s advertising revenues fell short of analyst expectations, while the cloud business exceeded projections.

Earlier, the Federal Reserve left interest rates unchanged, despite inflationary pressures continuing to mount. Stocks rose modestly, while short-term Treasury yields fell during Chairman Kevin Warsh’s press conference.

🔎 Dig deeper here for a recap of the day in markets.