Alphabet falls 10% in premarket, putting it on course for its biggest ever post-earnings drop

The Google headquarters in Mountain View, California, US, on Tuesday, July 21, 2026.David Paul Morris | Bloomberg | Getty ImagesAlphabet shares were sharply down in premarket trading on Thursday while Microsoft rose as investors focused on the tech giants' latest spending and free cash flow numbers in their third-quarter earnings.Alphabet was 10% lower in premarket trade while Microsoft was nearly 4% higher.If Alphabet closes more than 9.77% lower on Thursday, it would be its worst post-earnings reaction ever. The company went public in 2004.Microsoft reported $45.2 billion in capital expenditures and finance leases during the third quarter, which was 30% higher than a year ago, but below analyst projections of $50.67 billion. Free cash flow fell 27% to $18.63 billion but remained positive.Alphabet, in contrast, reported negative free cash flow of $9.07 billion for the third quarter, which fell much further than the $2.70 billion analysts expected by analysts. The Google parent maintained its full year capital expenditure guidance of between $195 billion and $205 billion.The earnings report comes as investors scrutinize AI spending plans of tech companies and are focusing on the re...