Alphabet shares fall 10% as Microsoft gains after earnings

Alphabet shares fell 10% in premarket trading Thursday after reporting negative free cash flow, while Microsoft rose nearly 4% following its third-quarter earnings, as investors weighed AI spending and returns. Alphabet posted negative free cash flow of $9.07 billion, far worse than the $2.70 billion analysts expected, and maintained its full-year capital expenditure guidance of $195 billion to $205 billion. Microsoft's capital expenditures hit $45.2 billion, below projections, with free cash flow down 27% but still positive. Alphabet's search advertising grew 12% to $63.35 billion but missed estimates, partly due to lower monetization in AI Mode. Microsoft's measured spending drew praise, while analysts cited Alphabet's "messy" results and Google's lagging Gemini chatbot as concerns.