Alphabet −13%, ServiceNow −27%, Microsoft Gives Back Gain
Earnings Tape — Alphabet −13%, ServiceNow −27%, Microsoft's gain gone, Lilly +6%
The market sent the bill for AI spending to the spenders. Alphabet trades at 282.08, 13.2% under last night's close, after free cash flow turned negative for a second straight quarter. ServiceNow is down 27.4% at 109.07 on a two-cent earnings miss, and Microsoft's 2.9% after-hours gain has turned into a 0.5% loss. The companies that collect that spending as revenue are still being paid: Cadence +6.1%, Celestica +14.1% and Amkor +11.5% above their pre-report closes, KLA +4.8% on day one. Eli Lilly gains 6.1% on a raised outlook. Underneath, the S&P 500 fund SPY slips 0.6% to just under its 50-day average and the Nasdaq-100 fund QQQ loses 1.8%, while the VIX stays near 16.9 and the Fed's hike odds for December sit at about 86% — a rotation out of tech, not a rush for the exits. Amazon reports after the close.
In this edition
The Midday 10 Thu, Oct 29, 2026 ~60 seconds 15:30 ET
Investors sold the cost of AI growth: Alphabet is down 13.2% and ServiceNow 27.4% from last night's closes, and Microsoft gave back its after-hours gain, while the AI suppliers that collect the spending, from Cadence to Celestica to KLA, are on track to finish rewarded.
US afternoon, intraday quotes ~15:15 ET (delayed)
The ten lines
- 1
DOWN Alphabet
GOOGL
Alphabet trades at 282.08, down 13.2% from last night's close of 324.89, the price our record measures its report from. We grade a report over three sessions: a close at least 3% above that entry counts as paid (rewarded), at least 3% below counts as sold (punished), and anything between is flat. The sold line is 315.14, and the stock sits far through it; the grade comes on Monday 2 November, on closing prices. This morning's Pulse, "Alphabet — Sold on the Cash Line", laid out why: free cash flow was negative $9.1 billion for a second straight quarter, as capex more than doubled to $51.4 billion while operating cash flow fell. Cloud grew 103% and revenue 25%, and the market looked past both to the cost of getting there. The Pulse set two markers for the window: a fill back toward 315 would say buyers treat the cash line as a timing issue, while a hold below 315.14 would file Alphabet with last week's unrewarded spenders. The afternoon leans hard toward the second, though Monday's closes decide.
- 2
DOWN ServiceNow
NOW
ServiceNow falls 27.4% to 109.07 from its entry close of 150.13. After hours it was down about 18%, and the regular session took it further. The software maker earned $1.00 a share against the $1.02 analysts expected, a two-cent miss, while revenue came in slightly above estimates. A gap that small between the numbers and a move that large says the market repriced the multiple it will pay for the business, not the quarter. The stock is far through its sold line of 145.63, which is graded on Monday's close.
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- 3
LEVEL Microsoft
MSFT
Microsoft gave back its night. It was up 2.9% after hours at 546.32, the one report that looked rewarded, and now trades down 0.5% at 528.30, under its entry close of 531.01. That puts it in the flat zone: paid needs a close at or above 546.94, sold at or below 515.08. After-hours prices are an early signal, not a grade, and this one did not survive the regular session. Even the night's best reaction could not hold its gain once the market priced the whole group.
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Ten lines on the US midday tape, not advice — an investment diary. Published every trading day at 12:30 ET. See The Morning 10 and the Daily Pulse.