Alphabet faces Oct. 28 AI spending test before Q3 results

Alphabet Inc. is due to report fiscal third-quarter results on October 28, with Seeking Alpha contributor Hunting Alphas saying AI spending could pressure free cash flow.

The October 20 contributor article said Alphabet trades at 25.8 times one-year forward earnings, above its long-term median, leaving investors focused on whether growth can offset heavier AI investment.

Hunting Alphas said updated capital-spending guidance could overshadow revenue growth if AI infrastructure spending pushes free-cash-flow margins below zero. Free cash flow is cash left after operating costs and capital expenditure.

The contributor also said Google’s Tensor Processing Units, or TPUs, should see faster system sales in 2027. TPUs are Google’s custom chips for artificial-intelligence workloads. Hunting Alphas said lower margins in that hardware business could limit operating-margin expansion at Google Cloud.

Regulation is another risk in the article. Hunting Alphas cited European pressure over Android access, search-data sharing and antitrust proceedings, saying those issues could create financial and competitive exposure for Alphabet.

The view is more cautious than recent BMO research covered by Atlas360 on October 20. BMO kept Alphabet at outperform and a top pick, with a $480 target and a $325 billion capital-spending view, arguing that higher investment can coexist with durable earnings growth.

Alphabet’s next test is the fiscal third-quarter release scheduled for October 28, when investors can compare management’s capital-spending outlook with cash-flow margins and Google Cloud profitability.

Source: Seeking Alpha contributor article, October 20, 2026; Atlas360 reporting on BMO research, October 20, 2026