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THE STREET: Ondo brings its tokenized portfolios to Solana

Altcoins

29 October 2026
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18:54

A sharp rally lifted Bitcoin, Ether, and Solana between 43% and 71% in the third quarter, giving the appearance of a synchronized market recovery.

Key Takeaways

Bitcoin’s NUPL spike tracked price, not fresh capital.
Ethereum fees tumbled 31% despite a 71% rally.
Solana’s quarterly fee pace eclipsed its trailing year.
Solana holders remain 7.4% underwater despite record throughput.

The figures come from Fidelity Digital Assets’ Q4 Signals Report, published October 28 with data through September 30.

Bitcoin

+43%

Q3 price

NUPL 0.09 → 0.36

Ethereum

+71%

Q3 price

Annual fees −31%

Solana

+61%

Q3 price

Q3 fee pace $224M a year

Bitcoin’s profit recovery is mostly the rally restated
Fidelity’s headline profitability metric for Bitcoin is Net Unrealized Profit/Loss (NUPL), which climbed from 0.09 to 0.36 during the quarter. As formulated by Glassnode, NUPL divides the difference between market capitalization and realized capitalization by total market capitalization. Realized capitalization prices each coin at the time it last moved onchain, establishing an aggregate cost basis for the network. A reading of 0.36 indicates that aggregate paper gains account for 36% of market value; it does not mean that 36% of active wallets or investors sit in profit.

Fidelity Digital Assets Bitcoin Net Unrealized Profit/Loss (NUPL) chart.
Because the prevailing spot price sits directly inside both the numerator and denominator of that equation, a market-wide rally mechanically elevates NUPL on its own. At the start of Q3, an initial NUPL reading of 0.09 meant the network’s realized cost basis stood at roughly 91% of its total market cap (1 − 0.09 = 0.91). If that aggregate cost basis is held unchanged while Bitcoin’s 43% quarterly price gain is applied to market value, the sensitivity formula proves that no substantial new capital was required to move the needle:

1 − (0.91 ÷ 1.43) ≈ 0.36

Coindoo’s sensitivity calculation using Fidelity’s rounded inputs

The calculation lands directly on Fidelity’s reported endpoint. While this sensitivity check cannot track individual wallet turnover, it shows that the apparent improvement in Bitcoin’s profitability was largely an arithmetic consequence of the rally itself. One data point in the report reveals an internal tension: Fidelity also reports that Bitcoin trades 45% above its aggregate cost basis, which under the standard formula implies a NUPL closer to 0.31, whereas a 0.36 reading corresponds to trading roughly 56% above cost basis. Regardless of minor methodological divergences, the fundamental takeaway stands: Bitcoin’s profitability signal merely shadowed its price, while broader market participation remained muted.

Ethereum got richer while its fees shrank
Ether posted the strongest performance of the three assets, rallying 71% and driving its NUPL out of deep negative territory (−0.43) back into positive ground (0.16). Yet the cash flow sustaining the underlying protocol deteriorated. According to Fidelity’s full report, rolling 12-month network fees dropped 31%, sliding from $294 million to $204 million. It earned network fees a “Negative” rating – the only such designation across Fidelity’s entire report. Daily fees averaged just $384,000 during the period, oscillating between $133,000 and $1.5 million.

Ethereum Net Unrealized Profit/Loss (NUPL) chart via Fidelity Digital Assets.
Underlying mainnet usage contracted alongside revenue. Ethereum’s 30-day average transaction count slipped 10% to fall below two million daily, and total active addresses declined 6%. Economically relevant addresses rose 30%, suggesting that while retail transactions left the base layer, high-value institutional settlement persisted. Fidelity’s diagnosis of this divergence was unsparing: the substantial increase in base-layer blockspace over the trailing year has yet to produce a proportional increase in economic demand. The pending Glamsterdam upgrade, slated to expand throughput further, will introduce more capacity into an already oversupplied mainnet execution market.

This decoupling is the direct consequence of Ethereum’s modular scaling architecture. Modern rollups execute transactions off-chain and post compressed data batches back to Layer 1, driving down user costs but systematically stripping fee revenue from the base layer. For ETH holders, this architectural shift carries profound economic trade-offs. Depressed base fees reduce the volume of ETH permanently removed from circulation under EIP-1559, turning the asset net-inflationary during the quarter. At the same time, this revenue contraction directly degrades what staking returns actually deliver, as validator yields compress toward bare issuance rewards in the absence of meaningful priority tips.

Stablecoin activity reflected this migration away from Layer 1. Average daily stablecoin settlements on Ethereum fell to $37 billion during the final 30 days of the quarter, marking a 45% drop from the $67 billion daily average recorded in the first month as volume continued shifting toward cheaper execution environments.

Solana’s fees are turning before the trailing number shows it
Solana presented the clearest evidence of operational expansion. Monthly transactions climbed 23% to reach record highs, active addresses expanded 53%, new addresses grew 50%, and economically relevant addresses surged 58%. While low-fee blockchains are inherently prone to automated wallet spam – a measurement distortion that Coin Metrics emphasizes in its address methodology – the 58% jump in economically relevant addresses suggests authentic user growth rather than mere network noise.

Solana’s headline revenue figure masks this intraday turnaround. Trailing 12-month fees dropped 13% to $193 million, primarily because the rolling window discarded the network’s high-activity historical peaks as it incorporated newer data. Looking at the quarter in isolation reveals a pronounced acceleration: daily fee capture averaged $922,000, which annualizes to a run rate of roughly $224 million. That pace comfortably surpasses the trailing-year figure, leading Fidelity to conclude that Solana’s protracted fee decline is finally carving out a durable floor.

Solana network fees and fee volume chart via Fidelity Digital Assets.
Stablecoin velocity accelerated along with transaction counts. Solana processed more than $10 billion per day in stablecoin transfers, up 20% from the second quarter, compressing the volume deficit between Solana and Ethereum to $26 billion (down from nearly $60 billion earlier in the year). Concurrently, Solana’s native stablecoin supply expanded by 9% ($1.37 billion), far outpacing the wider stablecoin market’s modest 0.5% growth.

Yet this operational momentum has not fully repaired investor balance sheets. Solana’s NUPL recovered from −0.73 to −0.08, but that still leaves the average SOL token roughly 7.4% below its aggregate cost basis, representing approximately $5.5 billion in unrealized losses across the network. Raw throughput has outpaced capital recovery, underscoring the ongoing comparison between Solana’s user counts and Ethereum’s financial depth: handling high-velocity transactions does not automatically translate into institutional balance sheet value.

Moving money isn’t earning money
Aggregate transfer volumes demonstrate how much capital is in motion, not how effectively a protocol captures revenue from that movement. Fidelity notes that estimated stablecoin transfer fees on Ethereum remained below $1 for four consecutive quarters, while Solana’s median transaction fee consistently stayed under a tenth of a cent. Under these conditions, billions of dollars in liquidity can cycle across either chain with negligible impact on protocol earnings. How much of that economic activity ultimately accrues to token holders depends entirely on the design of the fee capture engine:

Bitcoin → All transaction fees go directly to miners on top of programmatic block subsidies, serving purely as an operational incentive rather than a token-accrual mechanism. Developer guide

Ethereum → The base fee is permanently burned to reduce circulating ETH supply, while priority tips compensate block-proposing validators. Ethereum docs

Solana → Fifty percent of the base fee is burned while the remaining half goes to validators; priority fees pass entirely to block producers. Solana docs

Across all three networks, onchain activity reaches token holders indirectly – through mining security, validator staking yield, or supply reduction – rather than through direct dividend-like equity distributions. When transaction fees collapse or remain pinned at sub-cent fractions, those value-accrual channels quickly dry up.

Bitcoin’s miners earn more for a different reason
Bitcoin’s fundamental investment thesis has long centered on long-term holding rather than high-frequency transactional throughput, meaning sluggish fee generation carries fewer existential implications for the asset. However, the latest mining data reveals how operator revenues can expand even as onchain fee generation stagnates. Rather than relying on users spending more satoshis to transact, miners benefited from supply-side compute rationalization.

Following Bitcoin’s correction from its late-2025 peak, several major mining operators pivoted power infrastructure and high-performance computing assets away from SHA-256 hashing toward hosting artificial intelligence workloads. As a result, network hash rate dropped 9% year-over-year. With competitive pressure easing, hash price – the expected revenue generated per unit of computing power – jumped 25%. Consequently, miners captured approximately 22% more revenue than they did during the previous halving cycle, despite operating under a block subsidy that was twice as large. The improvement in miner margins stemmed from a drop in domestic competition, not from organic transaction demand.

Three networks, three answers
The third quarter delivered identical price tailwinds to the market’s three major tokens, but revealed three sharply diverging fundamental profiles. Bitcoin’s surge in paper profitability mirrored its price action with near-mathematical precision, while its mining economy leaned on an AI compute pivot rather than blockspace demand. Ethereum’s market capitalization expanded even as its base-layer annual fee revenue shrank 31% to $204 million under the weight of rollup migration. Meanwhile, Solana established a $224 million annualized fee run rate on record user throughput, yet its persistent sub-cent fee model has left the network’s token holders over 7% underwater.

This article is provided for informational purposes only and does not constitute financial or investment advice.

Author

Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP.
Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem.
To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem.
His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.

SALT LAKE CITY--(BUSINESS WIRE)--Palladyne AI Announces Third Quarter Fiscal 2026 Financial Results Conference Call and Webcast.

Key Takeaways Celestica trades at 16.79X forward earnings, above its sub-industry's 16.39X but below the sector's 19.25X.CLS saw CCS revenues surge 102% in Q3 2026, driven by 68% networking and 242% Compute & Storage growth.Celestica cut its 2026 free cash flow outlook to $460M from $600M amid rising inventory and capital demands.
Celestica Inc. (CLS - Free Report) is delivering rapid AI-driven growth, higher margins and rising earnings expectations, but the stock no longer carries an obvious valuation discount. Investors are paying a premium to the company’s sub-industry while Celestica commits more capital to meet projected demand.

That creates a clear trade-off. The operating story remains powerful, but the investment case increasingly depends on Celestica converting exceptional growth into durable cash generation without losing efficiency as capacity expands.

CLS Growth Case Is Strong but Valuation Is Less CheapCLS trades at 16.79X forward 12-month earnings, above the 16.39X multiple for the Zacks sub-industry. That premium is modest, but it means the market is assigning additional value to Celestica’s growth profile.

Image Source: Zacks Investment Research

The multiple remains below the 19.25X Zacks Computer and Technology sector level. Still, sustaining a premium to the sub-industry requires continued earnings expansion and disciplined execution, particularly as the company scales quickly.

Celestica’s AI Exposure Supports Rapid ExpansionConnectivity & Cloud Solutions revenues climbed 102% year over year to $4.87 billion in the third quarter of 2026. Networking revenues increased 68%, while Compute & Storage revenues surged 242%, showing how strongly AI and data-center investment is flowing through Celestica’s portfolio.

Peers are also positioning around the same spending cycle. Jabil Inc. (JBL - Free Report) said fiscal 2026 growth was supported by AI infrastructure and has continued adding data-center capabilities. Flex Ltd. (FLEX - Free Report) is expanding its Cloud and Power Infrastructure portfolio, including power-conversion and modular data-center offerings for AI deployments.

CLS Must Convert Growth Into Durable Free Cash FlowCash provided by operating activities reached $389.7 million in the third quarter, up from $126.2 million a year earlier. Free cash flow also improved to about $128 million, but the expansion is absorbing substantial capital.

Inventory rose to $4.51 billion from $2.19 billion at year-end 2025, while third-quarter capital expenditures reached $274.1 million. Celestica lowered its 2026 free cash flow outlook to $460 million from $600 million, primarily because of targeted working-capital investments to support 2027 growth.

Celestica’s Customer Concentration Raises the StakesCelestica’s 10 largest customers accounted for approximately 79% of 2025 revenues. Three major customers in the Connectivity & Cloud Solutions segment represented 32%, 14% and 12% of total net sales, respectively.

That concentration matters more as Celestica expands capacity around projected AI demand. Changes in customer spending, deployment timing or sourcing decisions could affect factory utilization, revenue growth and profitability, making execution increasingly important as the company invests ahead of demand.

CLS Signals Favor Growth and Momentum Over ValueThe balance currently tilts toward growth rather than pure value. Celestica’s earnings outlook, AI exposure and segment momentum support the case for continued expansion, but the sub-industry valuation premium and heavier investment needs reduce the margin for execution errors.

CLS currently carries a Zacks Rank #2 (Buy) and a VGM Score of A. Its Growth Score of A and Momentum Score of A align with favorable growth and earnings-revision characteristics, while the Value Score of C reflects a less-clear-cut valuation setup. Together, those signals support a constructive near-term view, though investors should weigh the stock’s growth profile against cash-flow demands and customer concentration. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways CLS' Q3 earnings beat estimates by 9.3%, while revenues surged 82.5% on strong AI infrastructure demand.CLS raised its 2026 revenue outlook to $21B and targets $40B in 2027, implying approximately 90% growth.Celestica plans $1.5B-$2B in 2027 capital spending while cutting its 2026 free cash flow outlook to $460M.
Celestica Inc. (CLS - Free Report) turned its third-quarter earnings beat into a forward-looking growth event by raising its 2026 outlook and setting ambitious targets for 2027. The company is scaling rapidly as AI infrastructure spending lifts demand for networking, compute and storage products.

The opportunity is substantial, but so are the execution demands. Investors must weigh accelerating customer demand against heavier capital spending, rising inventories and the risks of building capacity around aggressive growth forecasts.

CLS Q3 Beat Shows AI Infrastructure Demand AcceleratingCelestica reported third-quarter 2026 adjusted earnings of $3.30 per share, topping the Zacks Consensus Estimate of $3.02 by 9.3%. Revenues rose 82.5% year over year to $5.83 billion and surpassed the consensus mark of $5.50 billion by 6%.

Connectivity & Cloud Solutions revenues increased 102% year over year to $4.87 billion. Within the segment, Compute & Storage revenues jumped 242%, while Networking revenues increased 68%, reflecting heavy investment in AI and data-center infrastructure.

The same spending cycle is attracting investment across the manufacturing ecosystem. Jabil Inc. (JBL - Free Report) said fiscal 2026 growth benefited from AI infrastructure demand and brought additional capacity online. Flex Ltd. (FLEX - Free Report) is expanding its Cloud and Power Infrastructure capabilities, including power-conversion technology aimed at AI data centers.

Celestica Raises 2026 Revenue and Earnings GuidanceManagement increased its 2026 revenue outlook to $21 billion from $20.5 billion after the stronger third-quarter performance and expected demand improvement in the fourth quarter. Adjusted earnings guidance rose to $11.55 per share from $11.30.

Celestica kept its 2026 adjusted operating margin outlook at 8.4%. Holding that profitability target while lifting the revenue forecast suggests management expects the business to absorb higher volumes without giving up the margin progress achieved during the year.

CLS Sets a $40 Billion Revenue Goal for 2027Celestica’s initial 2027 outlook calls for $40 billion in revenues, adjusted earnings of $21.50 per share and a 9% adjusted operating margin. The revenue target implies approximately 90% growth from the company’s updated 2026 outlook.

Management expects demand from hyperscalers and AI infrastructure customers to remain strong and said 2028 customer demand forecasts are meaningfully above the 2027 revenue outlook. That visibility supports the scale of the planned expansion, but it also raises the importance of converting customer forecasts into timely deployments.

Celestica’s Expansion Plan Raises Execution DemandsThe 2027 plan requires substantial investment. Celestica expects capital expenditures of $1.5 billion to $2 billion next year as it adds capacity to support projected multi-year demand.

Working-capital needs are already rising. Inventory reached $4.51 billion at Sept. 30, 2026, up from $2.19 billion at year-end 2025. Celestica also reduced its 2026 free cash flow outlook to $460 million from $600 million, primarily because of targeted working-capital investments for 2027 growth. Any change in deployment schedules or customer demand could therefore affect cash generation and capacity utilization.

CLS Signals Reinforce the Growth CaseThe latest outlook strengthens the growth narrative, but the investment case still depends on execution. Celestica must deliver a large capacity ramp while protecting margins and translating higher earnings into cash flow.

CLS currently carries a Zacks Rank #2 (Buy) and a VGM Score of A. Its Growth Score of A and Momentum Score of A support a favorable growth and earnings-revision profile, while the Value Score of C keeps valuation discipline relevant. The combination favors the stock’s growth and momentum characteristics, though the scale of the 2027 ramp leaves little room for operational slippage. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Space Exploration Technologies (SPCX -0.83%) entered the stock market with a bang. The Elon Musk-led space and artificial intelligence (AI) company made its debut earlier this year with the largest initial public offering (IPO) in history, and now sports a market cap of $2 trillion. That is the seventh-largest in the world.

Investors are bullish on SpaceX's growth prospects in AI and space connectivity. What could a $2,000 investment in SpaceX be worth in 10 years' time? When you look at the numbers, a lot is riding on future growth.

SPCX Space Exploration Technologies$144.02-$1.21 (-0.83%)

NASDAQ · As of 1:40 PM ET 10/29/26

Large AI and space investments As Musk is wont to do, SpaceX is trying to tackle many growing industries at once. This includes AI through the xAI business (also owned by Musk) that was acquired before the IPO. SpaceX poured $16.5 billion into AI capital expenditures (capex) last quarter, more than its entire quarterly revenue. (Note that the company calls that segment Super Intelligence.) Management expects a roughly twofold increase in consolidated capex this quarter, resulting in up to $40 billion spent in a single three-month period.

SpaceX is making these large capital investments due to the apparently insatiable demand for data centers among AI companies. Revenue from SpaceX's AI infrastructure division grew by more than 10x last quarter to $7 billion, with further aggressive growth expected this quarter.

It is also growing quickly in space-based connectivity with Starlink satellite internet. Connectivity revenue was $5.25 billion last quarter, up from $3.1 billion in the same quarter a year ago. As more Starlink satellites launch into orbit, Starlink revenue should continue to compound.

Image source: Getty Images.

The bull case assumes aggressive growth While the business is growing quickly, a SpaceX bull case requires very optimistic growth assumptions over the coming years. Musk believes the company's annual recurring revenue (ARR) could reach $500 billion or more by the end of 2027, translating to $125 billion in Q4 2027 revenue.

In the third quarter, revenue was $14.6 billion across all of SpaceX. So getting to $125 billion from now would require close to 10x growth in revenue, which does not seem realistic. But, if SpaceX can become a winning neocloud provider of cloud services for AI, it could reach $1 trillion in revenue sometime in the next 10 years. That's still a highly optimistic prediction, but more realistic than Musk's claim.

Where could SpaceX be trading in 10 years? Now, $1 trillion in revenue would be quite nice for SpaceX, and could lead to $100 billion in operating earnings if margins across the entire business reach 10%. As a reseller of compute, it may only be able to obtain this level of profit margins in a normalized environment. There is much uncertainty over how profitable these AI investments will be, since SpaceX is spending monumental amounts of money on data centers that need customers in order to get a return on the upfront investment.

Now, $100 billion in earnings power versus a current market cap of $2 trillion is a ratio of 20. That's not exactly dirt cheap when making forward assumptions over the next 10 years. For that reason, I think an investment in SpaceX would not do very well at today's prices. I think $2,000 invested in SpaceX will be worth around $2,000 -- or even lower -- 10 years from now.

Gold (XAU/USD) dives over 1% on Thursday after a tranche of US economic data cemented the case for another rate hike by the Federal Reserve (Fed) at the December 9 meeting. At the time of writing, XAU/USD trades at $4,019 after reaching a high of $4,069.

Meta took down its ad touting Muse's ability to 'see who unfollowed you' on Instagram. Very interesting…

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Senior Correspondent covering technology and culture

Meta's Muse AI agent can track who unfollowed you on Instagram. I wonder how Instagram feels about that?

Smith Collection/Gado/Getty Images

Muse, the AI agent from Meta, can do many wonderful and useful things. It can help organize your inbox, book travel plans for you, and buy you lunch.

But one thing that Meta has decided it shouldn't brag about is that it can track who unfollowed you on Instagram.

About a week ago, Rachel Karten, who writes the excellent marketing newsletter Link in Bio, noticed a strange ad on Instagram. The ad encouraged people to download Muse, with an image of the fuzzy mascot holding up red and green Tinder-esque signs, suggesting you could "See who unfollowed you each week."

Finding out who unfollowed you on Instagram is something people have wanted to know since the app first launched. But Instagram — for good reasons — has avoided making this a feature on its own app.

I reached out to Meta to ask about this seeming clash, and a Meta spokesperson confirmed to Business Insider that the ad had been removed and is no longer active in the Meta ad library.

Instagram doesn't want you to know your unfollowsHere's the tension: Instagram knows that people want this feature, but it also knows it would be bad for the platform's vibes.

Instagram head Adam Mosseri regularly does AMAs on his personal account, and he's answered questions about why there's no "who unfollowed me" feature. His reasoning (gone from his page but have been aggregated in other videos) is that they want to make people feel comfortable unfollowing people they're no longer interested in.

To most people, it is obvious that this feature could hurt people's feelings, especially younger users (let's assume that Instagram does care about teen users' feelings here, although I understand if you have some hesitations on that). Feeling bad while using the platform is a bad user experience!

It's also ultimately bad for Instagram. If you're reluctant to unfollow accounts you don't like, then you'll end up with a feed that's less compelling, and you'll end up opening Instagram less often or spending less time on it. That's bad for Instagram's daily active user metrics!

Yes, Muse can actually do thisThere are, and have been, third-party services that can track who unfollows you. These sometimes require access to your login info in ways I definitely wouldn't recommend, and can track over time who has unfollowed you. So it's not like Muse is doing something totally novel or unheard of here.

I asked Muse to do this for me, and it said it could — with a caveat: it will start tracking my follow lists to see who unfollows me going forward, but it can't retroactively check who unfollowed me in the past (that's mostly the same as the other trackers). And honestly? I don't want to know! No thanks! Yikes!

I asked Muse to track who unfollowed me on Instagram (despite not wanting to really know). It could only track going forward, but after two days, it found one. 

Business Insider

Is this just one stupid ad? Yes. Was it set up and run as an ad by someone at Meta far removed from Instagram's philosophy on unfollows? Probably. Is it the most shocking news in the world if Meta runs a single ad and then takes it down? No.

But this interests me so much because it gets at a bigger and thornier issue. AI agents like Muse are what Meta clearly sees as the future of the company and how people use its services. But AI agents' abilities and use cases may be at odds with the nature of social media.

In the simplest way, AI agents are supposed to help you be efficient and get things done. Social media is supposed to help you waste your time.

These are two vastly different objectives — and it's going to be interesting to see how these two new technological pillars of Meta clash or complement each other.

Already, we have one Meta product (Muse) that is more than happy to do something that another Meta product (Instagram) has long discouraged.

There are plenty of other features that people want to do on social media, but Instagram and Facebook don't allow because it's bad for the overall health of the platforms. Suddenly, AI agents like Muse can do these long-forbidden things. The question is: how far is Meta willing to cannibalize the health of its own social platforms for the sake of growing its AI?

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Katie Notopoulos is a senior correspondent at Business Insider who writes about technology, business, and culture.Previously, Katie was a tech reporter at BuzzFeed News and has written for The Atlantic, The New York Times, Fast Company, and MIT Technology Review.

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Alphabet spent more on capital expenditures last quarter than it generated in operating cash flow, so it turned to stock sales and a mountain of new debt to keep the AI buildout running. What that means for shareholders is more…

Alphabet (NASDAQ:GOOG | GOOG Price Prediction, NASDAQ:GOOGL) spent $51.355 billion on capital expenditures in the third quarter of 2026, up 114.4% from the prior year. The cash-flow statement released after the close on Oct. 28, 2026 shows how it paid for that.

Alphabet raised about $41.4 billion in gross proceeds, adding $12.371 billion from common stock sales with $28.996 billion of new debt. After $3.626 billion in debt repayments, Alphabet’s net new money came to about $37.7 billion.

Alphabet bought back $0 of its own stock in the quarter, versus $11.504 billion in the third quarter of 2025.

Alphabet shares closed Oct. 28 at $324.89 and traded at $292.50 after hours around 7:59 p.m. ET, down 9.97%. The quarterly 10-Q had not appeared on EDGAR as of early Oct. 29.

What Alphabet Actually Raised in the Quarter All of the quarter’s stock sales went through Alphabet’s at-the-market (ATM) program. Under an ATM program, a company sells new shares into the market in small tranches at the current price.

Alphabet sold 12 million Class A shares for $4.3 billion and 24 million Class C shares for $8.1 billion, leaving Alphabet $27.6 billion of capacity as of Sept. 30.

Alphabet announced the $40 billion ATM program on June 2, 2026, as part of an $84.75 billion equity raise. The third quarter was the first one in which those sales were scheduled to start.

The June release said Alphabet planned to use ATM proceeds “primarily to facilitate, for a period of time, an administrative change in how Alphabet meets tax obligations” linked to employee stock awards. In the quarter, Alphabet Inc.’s net payments for stock-based awards came to $5.368 billion.

The capex money linked directly to debt. Alphabet Inc. issued $28.7 billion of senior unsecured notes for general corporate purposes.

Dilution and Interest Costs Now Reach GOOGL Owners Alphabet’s diluted share count rose to 12,368 million from 12,203 million, up about 1.4%. Buybacks used to reduce that count, which helped earnings per share grow faster than profits, but the count is now going up.

Alphabet Inc.’s interest expense rose to $967 million from $143 million. Alphabet’s long-term debt reached $125.102 billion, versus $46.547 billion at the end of 2025. Alphabet Inc. also paid $298 million in preferred dividends.

Spending Has Outrun Cash Flow for Two Quarters Alphabet’s operating cash flow of $42.290 billion did not cover capex, so free cash flow was negative $9.065 billion, following Alphabet’s negative $5.855 billion in the second quarter. Alphabet’s trailing 12-month free cash flow fell about 73% to $19.747 billion.

Alphabet CFO Anat Ashkenazi kept 2026 capex guidance at $195 billion to $205 billion. She also said, “We continue to expect our CapEx to increase significantly in 2027.”

Ashkenazi said Alphabet ended the quarter with $265.1 billion in cash and marketable securities. That total includes $90.4 billion of stock holdings, the same kind of asset behind the quarter’s $8.7 billion loss. That is part of why Alphabet borrows anyway. The release did not say when Alphabet will use its remaining ATM capacity, and it gave no figure for 2027 capex.

What Cloud Growth Means for GOOGL Owners The spending is likely already bringing in revenue fast enough to justify some dilution. Google Cloud revenue rose 103% to $30.709 billion, and operating income reached $11.121 billion, up from $3.594 billion a year earlier.

With a debt-to-equity ratio of 0.143 and a trailing P/E of 14, Alphabet can keep borrowing without stressing its balance sheet. Free cash flow may stay negative through 2027, which is likely the cost of Alphabet’s expansion at this stage.

The fourth-quarter call will show whether this argument holds, and it weakens if Alphabet Inc. sharply raises 2027 capex while Cloud growth slows well below 103%, or if the 10-Q shows it quickly drawing down the $27.6 billion left in the ATM program. A move back above the $324.89 close would show the market has absorbed the raise.

Contact [email protected] for any questions or corrections.

New York, New York--(Newsfile Corp. - October 29, 2026) - Bronstein, Gewirtz & Grossman, LLC, a nationally recognized investor-rights law firm, announces that a class action lawsuit has been filed against Alphabet Inc. (NASDAQ: GOOG) and certain of its officers.

This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Alphabet securities between May 19, 2026 and July 16, 2026, both dates inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: bgandg.com/cases/alphabet-inc-goog-class_action_lawsuit.

Alphabet Case Details

The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that:

Gemini 3.5 Pro was delivering disappointing training results; as a result, the launch of Gemini 3.5 Pro would be significantly delayed; and as a result of the foregoing, Defendants' positive statements about Alphabet's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.What's Next for Alphabet Investors?

A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm's site: bgandg.com/cases/alphabet-inc-goog-class_action_lawsuit, or you may contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC at 917-590-0911. If you suffered a loss in Alphabet you have until December 1, 2026, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.

No Cost to Alphabet Investors

We, Bronstein, Gewirtz & Grossman LLC, represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys' fees, usually a percentage of the total recovery, only if we are successful.

Why Bronstein, Gewirtz & Grossman, LLC for Alphabet Securities Class Action?

Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide. More at www.bgandg.com

"Our practice centers on restoring investor capital and ensuring corporate accountability, which serves to uphold the essential integrity of the marketplace," said Peretz Bronstein, Founding Partner of Bronstein, Gewirtz & Grossman, LLC.

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LOS ANGELES, Oct. 29, 2026 (GLOBE NEWSWIRE) -- The Law Offices of Frank R. Cruz reminds investors of upcoming lead plaintiff deadlines in securities class action lawsuits filed on behalf of shareholders of Alphabet Inc. and Coastal Financial Corporation. Investors who wish to seek appointment as lead plaintiff must file a motion by the deadlines listed below.

If you lost money on these investments, contact The Law Offices of Frank R. Cruz about these class actions to learn about your legal rights, by calling 310-914-5007 or emailing [email protected].

Alphabet Inc. (NASDAQ: GOOGL)

Class period: May 19, 2026 through July 16, 2026Lead plaintiff motion deadline: December 1, 2026Case: Stewart v. Alphabet Inc. et al., filed in the U.S. District Court California Northern District (San Jose)
According to the Alphabet Inc. complaint, throughout the class period the defendants made false and/or misleading statements and/or failed to disclose that: (i) that the Gemini 3.5 Pro was delivering disappointing training results; and (ii) that, as a result, the launch of Gemini 3.5 Pro would be significantly delayed.

If you are a Alphabet Inc. shareholder who suffered a loss, click here to participate.

Coastal Financial Corporation (NASDAQ: CCB)

Class period: October 28, 2024 through July 29, 2026Lead plaintiff motion deadline: December 1, 2026Case: Allegheny County Employees' Retirement System v. Coastal Financial Corporation et al., filed in the USDC Western District of Washington at Seattle
According to the Coastal Financial Corporation complaint, throughout the class period the defendants made false and/or misleading statements and/or failed to disclose that: (i) the credit quality of a substantial CCBX partner loan portfolio, comprising approximately $500 million in loans and nearly 23% of all CCBX loans, had materially deteriorated; (ii) as a result of that deterioration, Coastal faced significant exposure to credit losses notwithstanding Defendants’ repeated representations concerning the credit protections provided by its CCBX partner agreements; and (iii) Coastal’s risk management and credit monitoring practices were inadequate to identify, adequately account for, and mitigate the deterioration of the CCBX partner loan portfolio and the resulting risks to Coastal.

If you are a Coastal Financial Corporation shareholder who suffered a loss, click here to participate.

What should investors in these cases do now?

Investors need not take any action at this time to be class members in these cases. Investors may retain counsel of their choice or take no action and remain absent class members. No class has been certified yet in any of these cases.

For more information about these class actions or your rights, contact Frank R. Cruz of The Law Offices of Frank R. Cruz at 310-914-5007, by email at [email protected], or visit the firm's case page.

If you inquire by email, please include your mailing address, telephone number, and number of shares purchased.

About The Law Offices of Frank R. Cruz

The Law Offices of Frank R. Cruz investigates and prosecutes securities fraud and corporate malfeasance class actions. With nearly 20 years of litigation experience, the firm focuses on complex securities class actions and gives each client personal, one-on-one attention throughout the legal process.

Prior results do not guarantee a similar outcome.

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Key Takeaways Alphabet missed Q3 earnings and revenue estimates, sending shares sharply lower in premarket trading.Alphabet's cloud growth remains strong, but search weakness weighs on sentiment.Rising capex and two consecutive quarters of negative free cash flow raised investor concerns.
Alphabet (GOOGL - Free Report) came up with disappointing third-quarter 2026 earnings on Oct. 28, after market close. Earnings of $2.12 per share came in below the Zacks Consensus Estimate of $2.94 by 27.89%. The bottom line fell 26.13% from earnings of $2.87 per share recorded in the same period last year.

GOOGL shares declined about 11.5% in pre-market trading on Oct. 29 as the company missed revenue and earnings estimates. Negative free cash flow and disappointing performance in its core search advertising business left investors disappointed.

Snapshot of Q3 EarningsAlphabet posted revenues of $111.21 billion for the quarter ended September 2026, failing to beat the Zacks Consensus Estimate of $111.8 billion by 0.53%. However, revenues increased 27.14% from the year-ago quarter.

Alphabet’s net income for the quarter fell about 25.18% from the year-ago quarter to $26.17 billion. However, the tech giant’s operating income for the quarter was $40.58 billion, which marked an increase of 29.93% from the year-ago quarter.

Segment SnapshotsThird-quarter revenues from Google advertising reached $82.01 billion, up 10.56% from the year-ago quarter. The segment’s revenues missed the Zacks Consensus Estimate of $83.52 billion by 1.81%. The segment includes Google Search & other, YouTube ads and Google Network.

Revenues from Google Search & other, which reached $63.35 billion in the third quarter, marked a rise of nearly 12% from $56.57 billion in the year-ago quarter. YouTube ad revenues increased 9.22%, to reach $11.21 billion in the third quarter.

However, revenues from both Google Search & other and YouTube ads lagged the Zacks Consensus Estimate by 2.53% and 1.21%, respectively. According to Yahoo Finance, the disappointing performance of the search business raised investor nervousness. As per the article, the revenue miss fueled concerns that Google's search dominance could face growing competition from AI chatbots such as Claude and ChatGPT, despite the company's massive investments in AI.

Revenues from Google Services, which includes Google advertising and Google subscriptions, platforms and devices, increased 10.63% from the year-ago quarter, reaching $96.3 billion. Operating income from the segment reached $39.16 billion for the quarter ended September 2026, marking an increase of 16.79% from the prior-year figure of $33.53 billion.

Alphabet’s Google Cloud business witnessed a substantial surge, with operating income increasing to $11.12 billion, an impressive 209.43% increase from the prior-year figure of $3.59 billion. Revenues from the Cloud segment also witnessed a substantial rise of 102.61% year over year to $30.71 billion. The segment’s revenues surpassed the Zacks Consensus Estimate of $29.16 billion by 5.32%.

Google Cloud posted record growth, driven by strong performance across Google Cloud Platform (GCP), enterprise AI Solutions and enterprise AI Infrastructure, as well as core GCP services.

Alphabet's Capex Surge and Cash Burn Worry InvestorsAlphabet reported capital expenditures of $51.36 billion for the quarter ended September 2026, up nearly 114.4% from $23.95 billion in the year-ago quarter. The company's capital expenditures totaled $131.95 billion in the first nine months of the year, up from $63.59 billion in the same period last year.

Alphabet kept its 2026 capital expenditure forecast unchanged at $195 billion to $205 billion, following an increase from $190 billion in the second quarter. The company expects capex to top $200 billion this year and climb above $300 billion in 2027, as per a CNBC article. The company’s chief financial officer, Anat Ashkenazi, told analysts during an earnings call that Alphabet expects capital expenditures to increase significantly in 2027, as quoted on the abovementioned CNBC article.

As investors grow increasingly concerned about negative free cash flow across Big Tech, GOOGL reported negative free cash flow of $9.06 billion in the third quarter, worse than Wall Street estimates and marking its second consecutive quarter of negative free cash flow in 2026, following a deficit of $5.86 billion in the second quarter.

Alphabet’s Stock OutlookAlphabet currently has an average brokerage recommendation (ABR) of 1.20 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations made by 54 brokerage firms.

The current ABR remains unchanged from a month ago and signals favorable analyst sentiment toward the tech giant. However, sluggish third-quarter results and expectations of a disappointing fourth quarter could prompt analysts to reassess their outlook.

Of the 54 recommendations deriving the current ABR, 47 are Strong Buy and three are Buy. Strong Buy and Buy, respectively, account for 87.04% and 5.56% of all recommendations, remaining unchanged from a month ago.

Based on short-term price targets offered by 51 analysts, the average price target for Alphabet comes to $432.69, ranging from a low of $350.00 to a high of $515.00. The average price target represents an increase of 33.18% from the last closing price of $324.89 (as of market close on Oct. 28). The tech giant has a Zacks Rank #3 (Hold) and a Momentum Score of A.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ETFs to ExploreHere, we have highlighted ETFs with heavy exposure to Alphabet.

Global X PureCap MSCI Communication Services ETF (GXPC - Free Report) has an exposure of 31.49% to GOOGL.

VanEck Communication Services TruSector ETF (TRUC - Free Report) has an exposure of 14.86% to GOOGL.

Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) has an exposure of 14.06% to GOOGL.

Vanguard Communication Services ETF (VOX - Free Report) has an exposure of 13.97% to GOOGL.

iShares Global Comm Services ETF (IXP - Free Report) has an exposure of 13.12% to GOOGL.

State Street Communication Services Select Sector SPDR ETF (XLC - Free Report) has an exposure of 12.49% to GOOGL.

Alphabet (GOOG -12.57%) (GOOGL -12.71%) shares tumbled more than 11% on Thursday, plunging toward $287 and marking one of the steepest single-day sell-offs in the company's history. As of 11:50 a.m. ET, the Class A stock (the one with votes) is down 11.8%, and the Google parent has lost $410 billion of market value.

The correction followed Alphabet's third-quarter report, which delivered the tech giant's first bottom-line earnings miss against Wall Street consensus since the last quarter of 2022.

GOOGL Alphabet$283.61-$41.28 (-12.71%)

NASDAQ · As of 1:36 PM ET 10/29/26

Unpacking the first earnings miss in nearly four yearsLet's not beat around the bush. Alphabet missed the Street's bottom-line consensus, posting earnings of $2.12 per share against expectations near $3.02. But it's fair to consider the reasons before hitting the "sell" button.

The shortfall was amplified by an $8.2 billion non-operating, unrealized loss from a decline in the value of Alphabet's equity stake in Space Exploration Technologies (SPCX -0.58%), alongside a $5.2 billion cash payment for an EU antitrust fine.

Keep in mind that Alphabet famously doesn't issue revenue and earnings guidance, leaving analysts to develop their own financial models. It's more guesswork than usual.

In this light, the miss looks more like an accounting paper-cut than a broken business model. After all, Google Cloud revenues more than doubled year-over-year, and search queries posted their largest volume growth in five years.

Image source: Alphabet.

A half-trillion-dollar backlog proves the AI demand is realThe real albatross is Alphabet's beastly capital expenses. The company spent $51.4 billion in capex this quarter alone, resulting in a free cash flow burn of $9.1 billion. Management is holding firm on its full-year spending guide of $195 billion to $205 billion. Naturally, this heavy lifting is starting to show up on the income statement as rising depreciation and amortization (D&A).

That explains why the stock's trailing P/E is an affordable 15.0 while the forward multiple creeps up near 19.0 -- still reasonable but higher than the current ratio. The market is pricing in tomorrow's D&A hangover today.

Here is the irony: Google Cloud's backlog swelled to $561 billion. Customers are lining up around the block for AI compute, TPU systems, and Gemini enterprise seats. Management isn't guessing; they are scrambling to build capacity for confirmed demand.

For long-term shareholders willing to absorb near-term margin compression, the core business remains a cash-generating engine. The costly AI infrastructure will keep writing Alphabet's headlines anyway.

After the market closed on Oct. 28, Alphabet (GOOGL -12.71%) reported that its cloud business had more than doubled its revenue in a year. In the same release, it showed that it had spent about $9 billion more cash than it brought in during the quarter. The stock fell over 10% at Thursday's open.

Rule Breakers recommended Alphabet on June 9, 2022, at a split-adjusted $113.75. Even after that drop, the stock has gained more than 150% from that price and remains comfortably ahead of the S&P 500. Across Motley Fool services, Team Rule Breakers and Team Hidden Gems have recommended it many times since.

The first of six Rule Breakers Principles is: Make Your Portfolio Reflect Your Best Vision for Our Future.

The idea is to own companies whose success would build the world you hope to see, and to lean optimistic about where that world is heading. Rule Breaker investors favor companies with multiple futures. Most large companies have only a couple of realistic paths ahead, while the best innovators may have a dozen or more. David Gardner has long pointed to Alphabet as the leading example, with Google's search profits paying for ventures from AI to self-driving cars.

Several Futures Arrived in One QuarterGoogle Cloud brought in $30.7 billion in the quarter, up 103%, and its operating profit roughly tripled. Part of that growth came from selling Alphabet's custom AI chips, called TPUs, to outside customers, a relatively new line of business.

Alphabet said search queries grew at their fastest pace in five years. It also owns stakes in other fast-growing companies, and swings in their value have moved its reported profits by tens of billions of dollars this year.

Google Cloud, long the third-place player in cloud computing, now accounts for nearly a quarter of Alphabet's revenue.

The Bill for All Those FuturesAlphabet expects to spend $195 billion to $205 billion on capital projects this year, mostly data centers and chips, and management said that figure will rise significantly in 2027. Spending at that pace pushed free cash flow negative for the quarter. Alphabet's long-term debt has climbed to about $125 billion, nearly six times what it was a year earlier.

Reported earnings per share fell about 26%, though most of that came from paper losses on its equity stakes. Operating income still grew 30%.

When the Engine SlowsSearch, the business that has paid for everything else, is losing speed. Google Services revenue grew 11%, down from 15% the previous quarter, and search revenue came in short of expectations. Search profits funded Alphabet's experiments for two decades, and borrowed money now covers part of that bill.

If AI demand cools before the new data centers pay off, the debt would stay on the books, and Alphabet's balance sheet would look a lot more like an ordinary company's.

Where That Leaves Alphabet's ShareholdersOwning Alphabet now means believing that cloud and AI chips will earn back their enormous cost, and that search slowed in one quarter without losing its grip on how people find things. It also means accepting a period in which debt covers part of what cash once paid for on its own. An investor who sees AI spending as a bubble will find that trade unappealing.

Alphabet's customers appear to be betting the other way, with Google Cloud's backlog of signed contracts above half a trillion dollars. Investors who share that view can buy those futures today for about 10% less than before the report.

Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) took an $8.7 billion paper loss on its investment portfolio in the third quarter, with Space Exploration Technologies Corp.‘s (NASDAQ:SPCX) falling share price doing most of the damage. The hit reduced earnings by 55 cents per share, accounting for roughly 61% of the 90-cent earnings miss — and continued declines in SpaceX stock suggests the accounting pain could continue into the current quarter.

The US filed a lawsuit on Thursday accusing Google of failing to give an employee his old job back or put him in a similar job following one year of military leave as a US Army reservist.

The case is a rare instance of the US government suing a private employer for violating the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which protects the civilian employment of military personnel called to active duty.

According to a complaint filed in Manhattan federal court, Mark Davisson had spent 2-1/2 years as a Google key account executive, where he handled cloud services accounts for asset manager BlackRock and hedge fund Bridgewater Associates, and managed the US business of the former Credit Suisse.

Army reservist Mark Davisson had spent 2-1/2 years as a Google key account executive, where he handled cloud services accounts for BlackRock and Bridgewater, and managed the US business of the former Credit Suisse. Mark Davisson / Facebook Employee fired after further military leave Upon Davisson’s return from leave in May 2023, Google – a unit of Mountain View, Calif.-based Alphabet – allegedly refused to let Davisson handle any customer accounts, depriving him of career advancement though he kept his pay and title.

The complaint said Google assigned Davisson in January 2024 to a cloud solutions position that also involved no management of customer accounts, and fired him seven months later following another military leave and as part of a broader workforce reduction.

Davisson has a home in Charlotte, NC, but lived and worked in Manhattan while Google employed him.

Google did not immediately respond to requests for comment.

The complaint said Google assigned Davisson in January 2024 to a cloud solutions position that also involved no management of customer accounts, and fired him seven months later following another military leave and as part of a broader workforce reduction. Mark Davisson / Facebook Lost wages and benefits The lawsuit was brought by the civil rights unit of the US Attorney’s office in Manhattan, with backing from Assistant Attorney General Harmeet Dhillon, the Trump administration’s top civil rights enforcer.

It seeks to recoup lost wages and benefits as well as additional damages for Davisson, and requires Google to ensure a nondiscriminatory workplace including by improving training regarding USERRA.

The suit seeks to recoup lost wages and benefits as well as additional damages for Davisson, and requires Google to ensure a nondiscriminatory workplace including by improving training regarding USERRA. Gado via Getty Images “Federal law ensures that our brave soldiers, who sacrifice so much to keep us safe, are not punished by employers when they return to the civilian workforce after completing their military service,” US Attorney Jamie McDonald in Manhattan said in a statement.

Amazon is slated to report third-quarter earnings results after the bell on Thursday.

Here's what analysts are expecting, according to LSEG:

Earnings per share: $1.96 adjustedRevenue: $202.31 billionWall Street is also looking at other key revenue numbers:

Amazon Web Services: $45.48 billion, according to StreetAccount Advertising: $20.82 billion, according to StreetAccount Investors expect to see robust growth in Amazon's cloud segment. AWS sales are predicted to grow 38%, according to StreetAccount, compared with a 37% gain last quarter. It would mark AWS's fifth consecutive quarter of revenue acceleration.

That momentum isn't expected to slow down. CEO Andy Jassy said Amazon's cloud capacity is "largely sold out" for next year, and it's received significant commitments for 2028 as well.

"We always leave a certain amount for on demand and our inference service Bedrock or EC2, but largely sold out all the big chunks," Jassy said on an Andreessen Horowitz podcast last week. "A good chunk of '28 is sold out."

Wall Street will be listening for any commentary from Amazon executives around AI spending.

Last quarter, the company hiked its capital expenditure forecast for 2026 to $220 billion, up from $200 billion. Analysts surveyed by StreetAccount expect Amazon's capex to creep up more than $280 billion in 2027.

Read more CNBC tech newsAI build-out hits snag as Google and Microsoft put off raising capex forecastsAlphabet earnings miss reflects first real sign that AI is taking a bite out of searchAs Waymo expands overseas, it remains a niche cash-burning businessHands-on with Apple’s first touchscreen laptop: Touch is totally optionalAmazon has rushed to bring more data centers online to meet surging demand for AI computing power. The aggressive spending has eaten into the company's cash flow. In July, the company reported negative free cash flow of $7.6 billion for the trailing twelve months, compared with positive free cash flow of $18.2 billion one year earlier. It's expected to be cash flow negative in the current quarter, with an outflow of $9.9 billion, according to FactSet estimates.

Alphabet and Meta both reported negative free cash flow in their latest quarterly earnings reports. Microsoft said Wednesday its free cash flow declined 27% in the fiscal first quarter, but its cash flow remained positive, unlike its hyperscaler peers.

As Amazon shells out more on AI, it's steadily trimmed its headcount. The company has laid off more than 57,000 staffers since 2022, or roughly 16% of its corporate workforce. The job cuts have continued on a rolling basis this year via smaller rounds of layoffs.

The company on Wednesday laid off some staffers in its device software and services team to "operate more efficiently and better align with our product roadsmap," an Amazon spokesperson confirmed to CNBC. Fewer than 250 employees were let go as a result of the job cuts, the company said.

During the third quarter, Amazon made headlines when it blocked Meta's Muse AI agent from shopping on its platform. The company said it was not given advance notice that Muse would access its webstore, and it never agreed to participate.

The move is in line with Amazon's broader stance on third-party agents accessing its site. Amazon has blocked dozens of external agents, including Perplexity, which the company sued last year over allegations that the startup concealed its AI shopping bots.

Amazon stock chart.

While it locks down its site from third-party agents, Amazon has increasingly invested in its own tools. In May, Amazon rebranded its Rufus AI shopping chatbot to Alexa for Shopping.

On Thursday, Amazon said more than 400 million shoppers have used the assistant, and the number of people using Alexa for Shopping's agentic features has "grown more than eight times since the start of the year."

The tool now has more than 100 shopping-related capabilities, the company said, including the ability to build gift lists, manage subscriptions and handle account changes.

As rivals Meta and OpenAI push deeper into AI shopping tools, analysts have said the services could pose a risk to Amazon's digital advertising business. Users are turning to services like Muse and ChatGPT to research products, or in some cases, handing off purchases to AI agents, which means they're bypassing sponsored ads on Amazon's site.

"We expect Amazon to eventually develop its own agentic shopping offering, with its proprietary purchase data and commerce infrastructure positioning it well," Deutsche Bank analysts wrote in a note last week. "The key question is whether Amazon can accommodate third-party agents on terms that preserve attractive monetization."

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Key Takeaways Microsoft reported Q1 fiscal 2027 revenues of $92.3 billion, up 19%, beating estimates by 1.88%.Azure revenues surged 48% to $33.2 billion, while Microsoft Cloud revenues grew 30% to $63.9 billion.Microsoft expects 2026 capital spending of $170 billion as AI demand exceeds available capacity. Microsoft (MSFT - Free Report) reported first-quarter fiscal 2027 earnings of $4.89 per share on a non-GAAP basis (excluding OpenAI investment impacts), which increased 18% on a year-over-year basis (up 19% in constant currency). The figure beat the Zacks Consensus Estimate by 3.82%. On a GAAP basis, earnings per share were $4.92, up 32% year over year.

Revenues of $92.3 billion increased 19% year over year (up 19% in constant currency) and beat the Zacks Consensus Estimate by 1.88%. The top line came above management's guided range of $89.85-$90.95 billion, with results exceeding the company's expectations across revenues, operating income and earnings per share.

Microsoft Cloud revenues totaled $63.9 billion, up 30% year over year (31% in cc), accelerating from 27% growth in the fourth quarter of fiscal 2026. Commercial remaining performance obligation reached $677 billion, up 73% year over year, with a weighted average duration of 2.3 years. Roughly 30% of this is expected to be recognized as revenue over the next 12 months, up 29% year over year, while the portion recognized beyond 12 months increased 98%. Commercial bookings declined 12% (down 11% in cc), reflecting large Azure commitments in the prior-year quarter, partly offset by a large Azure commitment signed this quarter.

Beginning fiscal 2027, Microsoft reports results under two segments, Agents and Infra and Devices and Consumer, replacing the earlier three-segment structure. The change was announced in September 2026, and prior-period figures have been recast to conform to the new structure.

MSFT's Q1 Segment PerformanceAgents and Infra

The Agents and Infra segment generated $76.8 billion in revenue, which grew 25% year over year (25% in cc).

Azure revenues surged 48% year over year (48% in cc) to $33.2 billion, accelerating from 42% growth in the prior quarter and ahead of the company's expectations, despite delays in some third-party capacity deliveries. Growth was driven by Foundry and improved CPU monetization. Foundry revenues more than tripled year over year, aided by efficiency gains across the GPU fleet that freed up additional capacity for customers, as well as higher revenue per token.

Microsoft 365 Commercial cloud revenues increased 17% on a reported basis (18% in cc), or 18% (19% in cc) when adjusted for a prior-year comparable that had benefited from one point of in-period revenue recognition. Results were ahead of expectations on stronger GitHub Copilot adoption and usage, partially offset by weaker sales execution in Microsoft 365 E3 and stand-alone SKUs. Paid Microsoft 365 commercial seats grew 5%. Average revenue per user growth was led by premium offerings, including Microsoft 365 Copilot, E5 and E7, the latter of which has already reached millions of paid seats.

Microsoft 365 Consumer cloud revenues rose 17% (16% in cc), as the business began lapping the benefit of the prior-year price increase. Total Microsoft 365 cloud revenues were $27.8 billion, up 17%.

Productivity and server licensing revenues declined 3% (down 2% in cc) to $8.4 billion. Industry solutions cloud revenues grew 10%, driven by Dynamics 365 and LinkedIn Talent Solutions, although booking trends continued to moderate. Frontier and support services revenues rose 4% (5% in cc) to $2.1 billion.

Operating income for the segment rose to $40.6 billion from $32.7 billion a year earlier, representing an increase of 24% (25% in cc). Operating margin decreased slightly to 53% as sales mix shifted toward Azure. Microsoft Cloud gross margin was 66%, down year over year.

Devices and Consumer

The Devices and Consumer segment generated $15.5 billion in revenues, down 3% year over year (down 3% in cc), pressured by a steep decline in Windows OEM and devices revenues, partly offset by growth in search and advertising.

Search and advertising revenues, excluding traffic acquisition costs, rose 12%, ahead of expectations on higher volume and rate across LinkedIn, Edge and Bing. Xbox content and services revenues fell 2% (down 1% in cc), as declines in third-party content and Xbox Game Pass were partially offset by growth in first-party content. Windows OEM and devices revenues declined 22%, with Windows OEM revenues down 27% (down 28% in cc) due to a prior-year comparable that benefited from Windows 10 end of support, inventory drawdowns by OEM and channel partners, and weaker PC market demand.

Operating income for the segment increased to $5.4 billion from $5.2 billion a year earlier, up 2% (3% in cc). Operating margin expanded to 35%, aided by lower amortization of intangible assets from the Activision acquisition.

MSFT's Notable Developments in Q1Microsoft announced its biggest Copilot update to date, combining Chat, Cowork, Autopilot and Code into a single unified experience across commercial and consumer users. Copilot daily users increased nearly 50% sequentially and more than five-fold year over year, while the number of customers with more than 50,000 Copilot seats rose more than eight-fold. Customers consuming Copilot credits through usage-based billing grew more than 75% in the quarter. The company did not provide an updated paid Copilot seat count this quarter.

Foundry crossed 120,000 customers, and revenues from open-source models on Foundry increased 10-fold. Microsoft completed pre-training of MAI Base 2, its next first-party base model, and released DecisionOne, a structured decision-making model used by more than 4,000 customers in its first month. Paid Fabric customers reached 44,000, up more than 50% year over year, while more than 50 million agents are now registered in Agent 365, up over 30% sequentially.

On GitHub, agent-generated pull requests increased six-fold over the past six months, and GitHub Advanced Security revenues grew more than 50% year over year. At GitHub Universe, the company announced broad availability of Copilot Fusion, which brings multi-model orchestration to software development.

Microsoft added 24 new data centers across five continents during the quarter, cut dock-to-live times for new GB300 systems in its largest regions by about 20% sequentially and docked its first NVIDIA Vera Rubin GPUs. Its in-house Maia 200 chip is delivering up to 1.7 times more tokens per watt across Teams and Copilot workloads.

LinkedIn surpassed 1.4 billion members, with time spent viewing feed content up 15% year over year. In gaming, Minecraft delivered a record quarter for engagement and revenues. The company also announced an employee voluntary exit offer, the estimated cost of which is included in its second-quarter guidance.

MSFT's Financial Performance in Q1Gross margin reached $62.6 billion, up 17% year over year, with gross margin percentage at 68%.

Total operating expenses increased to $16.6 billion from $15.7 billion, up 6%, driven by continued investments in research and development, compute capacity and talent. Research and development expenses were $9 billion, sales and marketing were $5.7 billion, and general and administrative expenses were $1.9 billion.

Operating income increased 21% year over year (22% in cc) to $45.9 billion, while operating margin expanded slightly to 50%. Net income reached $36.6 billion, up 32% on a GAAP basis. On a non-GAAP basis, excluding OpenAI-related impacts, net income was $36.4 billion, up 18% (19% in cc).

Other income and expense, net, was a positive $38 million in the quarter compared with a negative $3.7 billion a year earlier. Excluding the impact of OpenAI investments, other income and expense was a negative $234 million.

MSFT's Q1 Capital Expenditure and InfrastructureCapital expenditures, including finance leases, were $45.2 billion, below expectations as some anticipated third-party capacity deliveries were delayed. Roughly three-quarters of spending went toward short-lived assets, primarily CPUs and GPUs, including higher memory and storage costs. Finance leases were $7.4 billion, while cash paid for property and equipment was $39.4 billion.

Cash flow from operations totaled $58 billion, up 29% year over year, driven by strong cloud billings and collections. Free cash flow was $18.6 billion, down from $25.7 billion a year ago, reflecting higher capital spending.

As of Sept. 30, 2026, Microsoft had total cash, cash equivalents and short-term investments of $64.5 billion compared with $76.8 billion as of June 30, 2026. Long-term debt was $31.1 billion, with an additional $4.4 billion in the current portion of long-term debt.

Microsoft returned $10.2 billion to shareholders through dividends and share repurchases during the fiscal first quarter.

MSFT's OpenAI Partnership UpdateThe fiscal first quarter reflected net gains from investments in OpenAI of $207 million, adding 3 cents to earnings per share. This compares with the first quarter of fiscal 2026, when net losses from OpenAI investments decreased net income and earnings per share by $3.1 billion and 41 cents, respectively.

These OpenAI-related impacts have historically created volatility in reported GAAP results, leading the company to provide non-GAAP measures excluding these effects to help investors better understand operational performance.

MSFT's Q2 2027 OutlookFor the second quarter of fiscal 2027, Microsoft expects total revenues between $96 billion and $97.1 billion, indicating growth of 18% to 19%. Based on current rates, foreign currency is not expected to have a meaningful impact on revenues, cost of revenues or operating expense growth.

The Agents and Infra segment is expected to generate revenues between $80.1 billion and $80.7 billion, indicating growth of 24% to 25%. Azure revenue growth is projected at 49% to 50% in cc, with demand continuing to exceed available supply and some third-party GPU capacity contracts delayed to the second half of the fiscal year. Microsoft 365 Commercial cloud revenues are expected to grow approximately 19% in cc, while Microsoft 365 Consumer cloud revenues are expected to grow in the low teens. Microsoft Cloud gross margin is expected to be roughly 65%.

The Devices and Consumer segment is expected to generate revenues between $15.9 billion and $16.4 billion. Search and advertising revenue growth, excluding traffic acquisition costs, is expected in the low double digits, and Xbox content and services revenues are expected to grow in the mid-to-high single digits depending on the timing of first- and third-party content launches. Windows OEM and devices revenues are expected to decline in the mid-30s percentage range.

Cost of revenues is projected between $32.7 billion and $32.9 billion, up 26% to 27%, while operating expenses are expected between $18.5 billion and $18.6 billion, up 9%. Operating margin is expected to decline slightly year over year. Excluding any impact from OpenAI investments, other income and expense is expected to be roughly negative $300 million, and the effective tax rate is projected at approximately 20%.

Capital expenditures are expected to exceed $50 billion in the second quarter. Given the third-party capacity delays, Microsoft now expects calendar 2026 capital spending of approximately $170 billion, with spending expected to accelerate in the second half of fiscal 2027. The company expects to remain free cash flow positive in fiscal 2027.

MSFT’s Zacks Rank and Stocks to ConsiderCurrently, Microsoft carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices (ADI - Free Report) , Applied Materials (AMAT - Free Report) and Cisco Systems (CSCO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Analog Devices have rallied 54.4% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $13.00 per share, up by a penny over the past seven days, indicating an increase of 66.9% year over year.

Shares of Applied Materials have jumped 54.5% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.79 per share, unchanged over the past 30 days, indicating a rise of 35.8% year over year.

Cisco Systems shares have surged 45.3% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2027 earnings is pegged at $5.11 per share, unchanged over the past 30 days, indicating an increase of 18% year over year.

Key Takeaways MongoDB's upgraded fiscal 2027 outlook and long-term targets strengthen its position as an AI data platform.MDB targets 20% revenue growth and mid-20% Atlas growth, with limited capital spending and expanding margins.Microsoft faces rising AI infrastructure costs and cloud margin pressure, limiting near-term upside.
Microsoft (MSFT - Free Report) and MongoDB (MDB - Free Report) are both positioning their platforms at the center of enterprise artificial intelligence (AI) adoption. Microsoft monetizes AI through Azure, Foundry and Copilot, while MongoDB powers AI applications through its Atlas platform and Enterprise Advanced offering.

The two also compete directly, as Microsoft’s PostgreSQL, SQL Database and Cosmos DB services vie with MongoDB for the operational data workloads that feed AI agents. With both updating outlooks and launching agentic AI tools, the comparison is timely.

Let’s delve deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for MSFT StockMicrosoft’s AI strategy is gaining traction as its business model expands from per-seat subscriptions to consumption-based pricing. In October 2026, the company introduced the new Copilot, unifying Chat, Cowork, Autopilot and code in one experience, brought Office into the Copilot app and made Microsoft 365 E7 and Agent 365 generally available. At GitHub Universe, it launched Copilot Fusion, which routes coding tasks across multiple models. Commercial remaining performance obligation of $677 billion provides solid long-term revenue visibility.

For the second quarter of fiscal 2027, Microsoft expects revenues of $96-$97.1 billion, indicating 18-19% year-over-year growth. Azure revenues are expected to grow 49-50% in constant currency, while Microsoft 365 Commercial Cloud is projected to grow roughly 19%.

However, this growth comes at a steep cost. Microsoft expects second-quarter capital expenditure to exceed $50 billion, with 2026 spending of approximately $170 billion and further acceleration in the second half of fiscal 2027. Demand continues to exceed available supply, and some third-party GPU capacity deliveries have been pushed to the second half. Microsoft Cloud gross margin is expected to decline to roughly 65% due to a higher Azure mix, while operating margin is expected to dip slightly year over year.

The Devices and Consumer business remains a drag, with Windows OEM and devices revenues expected to decline in the mid-30s percent range due to elevated inventory, weak PC demand and a tough Windows 10 comparison. Although free cash flow is expected to stay positive in fiscal 2027, rising capital intensity limits near-term upside.

The Zacks Consensus Estimate for MSFT’s fiscal 2027 earnings is pegged at $19.66 per share. The estimate indicates 9.53% year-over-year growth.

The Case for MDB StockMongoDB is emerging as the intelligent data platform for the AI era. At its Investor Day on Sept. 29, 2026, the company launched MongoDB 9.0, delivering up to 2x higher throughput, along with Atlas Infinite, a new deployment option that separates compute from storage for AI-scale demand and Atlas Agent Engine, which unifies governance, memory and retrieval for running AI agents in production. MongoDB also launched the Atlas Managed MCP Server, connecting coding agents to live Atlas data, and made Search and Vector Search generally available in Enterprise Advanced.

These innovations are backed by a strong outlook. MongoDB raised its fiscal 2027 guidance and now expects revenues of $2.99-$3.03 billion, non-GAAP operating income of $616.3-$636.3 million and non-GAAP earnings of $6.39-$6.58 per share, with the second-half raise mainly driven by Atlas. For the third quarter, revenues are expected to be in the range of $756-$761 million.

At Investor Day, MongoDB also raised its long-term targets, now aiming for 20%+ total revenue growth and mid-20% Atlas growth over roughly three years, along with 100-200 basis points of average annual operating margin expansion. Remaining performance obligations surged 91% year over year to $1.52 billion, reflecting rising multi-year commitments.

MongoDB’s asset-light model is a key advantage, as it does not shoulder Microsoft-scale capital spending. With $2.4 billion in cash and investments, the company continues to actively repurchase its shares.

The Zacks Consensus Estimate projects 2026 earnings of $6.50 per share, representing a substantial 30.78% year-over-year growth. The earnings estimates have been revised upward over the past 30 and 60 days.

Valuation and Price Performance ComparisonBoth MSFT and MDB trade at premium valuations. In terms of forward 12-month Price/Sales (P/S), MSFT trades at 9.52X, while MDB trades at 9.19X. MDB’s premium is justified as its guidance calls for 20%+ long-term revenue growth, steady margin expansion and minimal capital spending, while MSFT’s multiple already prices in AI optimism amid soaring capital expenditure and margin pressure, making it prudent to wait.

MSFT vs. MDB: P/S F12M Ratio
Image Source: Zacks Investment Research

On price performance, MSFT shares have returned 9.8% over the year-to-date period, while MDB shares have lost 6.3%. MDB’s pullback offers investors an attractive entry point, as its raised long-term targets signal that fundamentals remain intact.

MSFT Outperforms MDB Year to Date
Image Source: Zacks Investment Research

ConclusionMongoDB holds an edge over Microsoft on several fronts. MDB benefits from a raised fiscal 2027 outlook, upgraded long-term targets of 20%+ revenue growth, expanding margins and an asset-light model that converts growth into free cash flow. Recent launches, including MongoDB 9.0, Atlas Infinite and Atlas Agent Engine, strengthen its AI positioning, while a lower forward P/S multiple and year-to-date share price decline offer a compelling entry point. Microsoft’s AI momentum is solid, but soaring capital expenditure, declining cloud gross margin and Windows weakness limit upside. Investors should buy MDB now and wait for a better entry point for MSFT. MSFT currently carries a Zacks Rank #3 (Hold), whereas MDB has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Microsoft shares gained 4% after fiscal Q1 2027 earnings and revenues beat consensus estimates.MSFT's cloud revenues grew 30%, while capital spending rose 29.5%, pressuring free cash flow.ETFs including FTEC offer diversified tech exposure, with MSFT holdings ranging from 11.18% to 14.63%.
Shares of software giant Microsoft (MSFT - Free Report) rose 4% in yesterday’s extended trading session (as cited in CNBC), following the company’s better-than-expected first-quarter fiscal 2027 results. The company added 24 new data centers across five continents in the fiscal first quarter, thanks to accelerating demand. This expansion is expected to remain a key long-term growth catalyst for MSFT.

However, the company’s capital expenditure, a metric that has been worrying investors across the market in recent times, went up 29.5% year over year to $45.2 billion and subsequently dragged down its free cash flow by 27% from the prior-year level. 

While management expects free cash flow to remain positive in fiscal 2027, persistent pressure on cash generation could temporarily constrain Microsoft’s financial flexibility. If sustained, this friction could even limit the company’s capacity for future infrastructure investments or raise leverage concerns among risk-averse investors — even as new data centers drive near-term revenue growth.

Against this backdrop, investors seeking exposure to Microsoft’s leadership in cloud computing — without absorbing the single-stock risk of its declining cash flow — should consider exchange-traded funds (ETFs) with significant MSFT holdings. This approach captures Microsoft’s upside while maintaining broad technology diversification.

Before exploring our top ETF picks, let us examine Microsoft’s fiscal first-quarter performance across key metrics to help investors make well-informed decisions.

A Brief Analysis of MSFT’s Q1 ResultsMicrosoft’s fiscal first-quarter adjusted earnings per share (EPS) beat the Zacks Consensus Estimate by 3.8%, while its revenues topped the consensus mark by 1.9%. The company delivered strong year-over-year results, with both revenues and earnings registering double-digit growth.

Segment-wise, revenues from MSFT’s Agents and Infra units grew 25%, backed by strength across the connected layers of its platform. Nevertheless, commercial bookings fell 12%, primarily due to tough year-over-year comparisons stemming from large Azure commitments in the prior-year period.

Revenues from its Devices and Consumer segment dropped 3% year over year, primarily on account of a 22% slump in its Windows OEM and Devices revenues.

As far as Microsoft’s cloud business is concerned, revenues improved 30%, backed by strong demand across Azure and M365 Commercial Cloud platforms. Azure revenues increased 48%, driven by Foundry and improved CPU monetization. M365 Commercial Cloud revenues rose 18%, driven by stronger GitHub Copilot adoption and usage. 

In relation to its shareholder-friendly moves, Microsoft returned $10.2 billion to its stakeholders in the form of dividends and share repurchases in the first quarter of fiscal 2027.

Microsoft expects to witness healthy growth in its commercial bookings in the fiscal second quarter. However, quarterly growth is expected to reflect lumpiness due to large Azure commitments secured a year ago. 

Business-wise, Microsoft expects M365 Commercial Cloud revenues to grow roughly 19% in constant currency (with minimal foreign exchange impact), driven by rising ARPU, seat additions, and strong traction in premium and usage-based offerings.

Its Devices and Consumer segment is projected to generate $15.9 billion to $16.4 billion in revenues in the fiscal second quarter, with search and advertising revenue (ex-TAC) forecasted to expand in the low double digits on steady volume and rate growth. Additionally, Xbox Content and Services is expected to grow in the mid-to-high single digits. 

Microsoft-Heavy ETFs to BuyGlobal X PureCap MSCI Information Technology ETF (GXPT - Free Report)

This fund, with net assets worth $140.8 million, offers exposure to 85 U.S.-listed companies classified within the Information Technology sector under the Global Industry Classification Standard. Of these, Microsoft carries the third spot, holding 14.63% of the fund. 

GXPT has rallied 26.3% year to date. The fund charges 15 basis points (bps) in fees and traded at a volume of 0.02 million shares in the last trading session.  

iShares U.S. Technology ETF (IYW - Free Report)

This fund, with net assets worth $25.13 billion, includes 148 software, semiconductors and tech hardware companies. Of these, Microsoft carries the third spot, holding 13.07% of the fund. 

IYW has surged 29% year to date. The fund charges 37 bps in fees and traded at a volume of 0.85 million shares in the last trading session.  

VanEck Technology TruSector ETF (TRUT - Free Report)  

This fund, with net assets worth $246.2 million, offers exposure to 77 information technology-related companies. Of these, Microsoft carries the fourth spot, holding 11.89% of the fund. 

TRUT has rallied 23.9% year to date. The fund charges 14 basis points (bps) in fees and traded at a volume of 0.15 million shares in the last trading session.  

Fidelity MSCI Information Technology Index ETF (FTEC - Free Report)

This fund, with net assets worth $22.15 billion, includes 298 information technology stocks. Of these, Microsoft carries the third spot, holding 11.18% of the fund. 

FTEC has risen 31.3% year to date. The fund charges 8 bps in fees and traded at a volume of 0.31 million shares in the last trading session.

Microsoft shares MSFT fell on Thursday, reversing early gains and premarket strength, as investors assessed the company's latest earnings, capital spending plans, and intention to raise $25 billion through a US bond offering. The stock declined despite Microsoft reporting stronger-than-expected fiscal first-quarter results, with revenue rising 19% year over year to $92.28 billion.

Bloomberg's Ed Ludlow breaks down Alphabet's weak search and ad sales which raised new fears that AI is eating into Google's core business and caused a record market cap wipeout. Plus, Bloomberg reports Microsoft is looking to tap the bond market for the first time since 2017, seeking at least $25 billion to support spending as AI cloud growth soars.

Stephanie Walter with HyperFRAME Research says the most interesting takeaway from Microsoft (MSFT) earnings is how it can extend AI revenue opportunities beyond Azure cloud. She adds that existing partnerships offer a wide moat to maximize opportunities through evolving tech.