Google and Samsung Shares Fell Despite Strong Results. Here's Why.
Alphabet's shares fell about 10% in after-hours trading on Wednesday, October 28, after growth in Google's search advertising revenue slowed. The Wall Street Journal reported the move under the headline "Google Shares Fall 10% as Growth in Search Revenue slowed." Its live coverage on Thursday, October 29, put the stock down 10% in premarket trading.
After-hours and premarket trading happen outside the regular market session, when fewer people are buying and selling.
The company's overall numbers were still strong. In its third-quarter release, Alphabet reported that total revenue rose 25% to $127.6 billion.
In my view, the sell-off is about speed, not size. A 25% jump is strong by any measure. But investors seem to have expected search, the part of the business that still brings in most of the company's cash, to grow faster. Anyone following that line closely will want to know whether the slowdown is a short-term blip or a longer trend.
A word of caution about that 10% figure. Prices before the regular session can swing more than usual, so the number shows where the stock traded in those early sessions, not where it settled. The closing price on the first regular trading day after the report is a cleaner reference point.
Samsung Electronics faced a similar test on Thursday. It released its third-quarter 2026 results on October 29, reporting consolidated revenue of 195.3 trillion Korean won, up 14% from the previous quarter. The company held its earnings call the same day.
The details were less clear. Bloomberg reported that the chip division's operating income, a measure of profit from its core business, missed estimates by about 2%. It also reported that Samsung's shares fell after the company did not say how it would return its rising profits to shareholders. Samsung raised its spending on artificial intelligence, and Bloomberg said this dashed expectations for payouts.
Bloomberg's reading points to a simple trade-off that investors reacted to. More money is going into AI now, and less of it is reaching shareholders in the near term.
The reaction makes more sense against what Samsung had said earlier. On October 8, the company projected that its quarterly profit would top 100 trillion won. Reuters put that at about $80 billion and described the projection as a world first for a technology company.
That projection set a high bar. The chip division's 2% shortfall was small in percentage terms. But when a company has promised exceptional profit, even a small gap stands out.
Why does this matter to ordinary people? Alphabet and Samsung are both large holdings in global stock indexes. An index fund is a basket that tracks a whole market, so when one of its biggest companies drops 10%, the fund feels it, even if you never chose that stock. Many pension plans work the same way.
For businesses that spend heavily, the broader lesson is about how investors reward spending. Samsung's reaction suggests investors will accept big AI costs only if they can see a path to cash coming back to them. Alphabet's suggests a strong quarter does not protect a stock when its most important business slows.
I would not treat either move as a verdict on AI over the long run. Two quarters of results, reported on different schedules and in different currencies, cannot settle a question that will play out over years. What the two reactions do show is narrower. At current valuations, meaning the price investors pay for each dollar of a company's earnings, the market punishes any gap between what companies promise and what they deliver. It is also unwilling to wait for payouts that have not been announced.
