Google Cloud Hits 24% of Alphabet Revenue, but SpaceX Writedown Causes First Earnings Miss in Four Years

Alphabet reported record Google Cloud revenue of $30.7 billion in Q3 2026, up 103% year-over-year and crossing 24% of total company revenue, but an $8.2 billion SpaceX equity writedown caused its first earnings miss in four years, triggering a 10% stock decline. The cloud division's operating income tripled to $11.12 billion with margins expanding to 36.2%, while contracted backlog reached $561 billion. Adjusted EPS of $2.67 fell short of the $3.02 consensus, driven by a FASB rule requiring quarterly fair-value marks on private-company stakes, reversing a $98 billion Q2 gain from Anthropic. Alphabet's $924 billion in purchase commitments signals sustained infrastructure spending, with 2027 capex projected at $280-310 billion despite negative free cash flow of $9.07 billion. Google Cloud's growth rate far exceeds AWS's 39% and Azure's 29%, while Search growth slowed to 12% amid regulatory risks.