Investors express caution ahead of Alphabet's third-quarter earnings report on October 28. They focus on escalating capital expenditures and the impact on free cash flow. Last quarter, AI infrastructure spending surged to $45 billion. This led to Alphabet's first negative free cash flow since 2004.
Alphabet reports robust revenue growth. Analysts expect the company to beat consensus estimates. However, the market focuses on returns from its substantial AI investments. Analysts view Google Cloud's rapid expansion and large contract backlog as significant positives. Key watchpoints for the report include sustained momentum and discipline in capital spending.