Alphabet's third-quarter results showed two constraints on AI expansion: its capital spending exceeded cash generated from operations, while Intel said component shortages held back shipments against demand.
Alphabet's revenue rose 25% to $127.58 billion. Google Cloud's revenue climbed 103% to $30.71 billion, and operating income reached $11.12 billion, versus $3.59 billion a year earlier. Search revenue grew 12% to $63.35 billion. Alphabet linked part of Search's slower growth to weaker ad monetization in AI Mode.
Alphabet spent $51.36 billion on capital expenditures, compared with $42.29 billion in cash generated by operations. That left free cash flow at negative $9.07 billion. At September's end, Alphabet reported $13.31 billion in inventory, compared with $2.44 billion at 2025 year-end. Alphabet said some cash was held in unsold Tensor Processing Unit systems, and other factors also contributed to the inventory rise. EconoTimes previously examined Alphabet's capital spending and negative free cash flow.
Intel's total third-quarter revenue rose 21% to $16.51 billion. Its Data Center and AI unit brought in $7.32 billion, up 78%. Server-chip average prices climbed 54% as volume rose about 10%; Intel attributed most of the price increase to a richer mix of higher-end products. Intel said supplies of advanced packaging substrates, memory and other components were too tight for it to fill every order. Intel set its fourth-quarter revenue outlook at $15 billion to $16 billion. The Client Computing and Physical AI business posted a 5% revenue decline, while volume for traditional PC chips dropped about 14%.
Intel Foundry reported $6.70 billion in revenue, with about 94% coming from transactions inside the company. Outside sales totaled $411 million, and the division reported an operating loss of $1.85 billion.
