Key Highlights

● Alphabet Class A shares rose 1.13% to $290.64 amid an AI-led rebound.

● Google introduced two new TPUs, the TPU 8i Max and TPU 8tx, on Nov. 9.

● Google Cloud Revenue rose 103% to $30.7 billion in the third quarter.

● Free Cash Flow turned negative at $9.1 billion as Capital spending more than doubled.

What kept Alphabet (NASDAQ:GOOGL) among Wednesday's most actively traded stocks was less a single headline than its size and its place in the AI race. The Google parent's Class A shares rose 1.13% to $290.64, with 5.96 million shares traded in the snapshot used for the ranking. With a Market Value of about $3.54 trillion, even a modest move translates into large dollar volume, which is how the most-active list is ranked.

Two forces supported the stock. The first was the broad rebound in AI-related shares after CoreWeave (NASDAQ:CRWV) reported third-quarter revenue of $3.66 billion late on Tuesday and raised its 2026 revenue guidance to $13 billion to $13.3 billion. That lifted the Nasdaq-100 by 2.28% and the S&P 500 by 1.31%. The second was company-specific: on Nov. 9, Google introduced two new tensor processing units, its in-house AI chips. GOOGL rose as high as $296.33 in recent trading before easing.

Alphabet lagged the chip stocks, however. Investors favored hardware suppliers on Wednesday, while big platform companies were mixed: Microsoft (NASDAQ:MSFT) fell 2.61% and Amazon (NASDAQ:AMZN) slipped 1.63%. The pattern suggests the market is rewarding companies that sell AI equipment more than those that buy it, since the buyers face rising spending bills. Alphabet sits on both sides of that divide. It is one of the largest buyers of AI infrastructure, but through its TPU program it is increasingly a seller as well.

Two new TPUs

The new chips are called TPU 8i Max and TPU 8tx. The 8i Max targets large context windows and agentic AI workloads that need a lot of memory and dense computing power. The 8tx is designed for confidential inference, which processes data while keeping it private and within a given jurisdiction. Google also expanded its Partnership with Advanced Micro Devices (NASDAQ:AMD), using AMD's fifth-generation EPYC processors as host chips for the TPU 8tx cloud systems. The launch brings Google's lineup to four distinct TPU systems introduced within one year. Google did not publish performance or pricing figures for the new chips.

TPUs matter for the Investment case because Google now sells TPU systems to outside customers, not just using them internally. That turns its chip program into a revenue line inside Google Cloud and positions it as an alternative to Nvidia (NASDAQ:NVDA) hardware.

What Alphabet does

Alphabet owns Google Search, YouTube, Android, Chrome and Google Cloud, and develops the Gemini family of AI models. Advertising remains the bulk of its revenue, but Cloud has become the fastest-growing part of the business. The Gemini app has passed 1 billion users.

Third-quarter results: cloud boom, cash squeeze

Alphabet reported third-quarter results on Oct. 28. Revenue rose 25% to $127.6 billion, roughly in line with estimates. Google Cloud was the standout: revenue more than doubled, up 103% to $30.7 billion, helped by AI infrastructure Demand and TPU system sales. Cloud Operating Margin widened to 36.2% from 23.7%, and the cloud Backlog reached $561 billion. Search and other revenue rose 12% to $63.4 billion, and YouTube ad revenue grew 9% to $11.2 billion. Consolidated operating margin improved to 31.8% from 30.5%.

Earnings fell short. GAAP EPS of $2.12 missed consensus by a wide margin, mainly because of unrealized losses on Equity holdings, including its SpaceX (NASDAQ:SPCX) stake. The bigger concern for some investors is cash. Capital spending more than doubled to $51.4 billion in the quarter, and free cash flow was negative $9.1 billion, versus positive $24.5 billion a year earlier. Alphabet kept its 2026 capital spending guidance at $195 billion to $205 billion and said spending will rise significantly in 2027. 2027 capex is signaled to top $300 billion.

Valuation

At a trailing P/E of about 15.2, Alphabet looks cheap compared with most megacap peers. Microsoft trades at about 27 times earnings, while Meta Platforms (NASDAQ:META) and Amazon each trade near 22 times. The lower multiple partly reflects the depressed GAAP Earnings from equity losses and worries about heavy spending. Analysts are upbeat, with a consensus "Strong Buy" rating from 53 analysts and an average price target of about $402. JPMorgan recently cut its target to $375 from $425 while keeping an Overweight rating.

The bull case

Bulls see Alphabet as one of the best-positioned companies in AI. It owns its models, its chips and its cloud, and it has a huge distribution base through Search, Android and YouTube. Cloud revenue doubling with expanding margins shows that AI investment is starting to pay off, and a $561 billion backlog gives visibility. Management expects TPU system sales to grow in the fourth quarter and ramp meaningfully in 2027. Search query growth reached its highest year-over-year rate in five years, which counters fears that Chatbots would erode the core business. With about $265 billion in cash and securities, Alphabet can fund its build-out.

The bear case

The bear case centers on spending. Negative free cash flow is unusual for Alphabet, and a capex budget expected to top $300 billion next year raises questions about returns. AI Mode queries monetize at lower rates, which slowed Search revenue growth, and management flagged Cloud margin pressure from greater use of third-party computing. The stock is down about 8% this year. A securities lawsuit alleging misleading disclosures about Gemini 3.5 Pro is also pending, though the claims are unproven.

TPU Customers and the February Capex Plan

Near-term, Nvidia's results on Nov. 17 will set the tone for AI stocks, and any comments on TPU competition will be relevant to Alphabet. Investors will also look for performance details and customer wins for the new TPU 8i Max and 8tx chips. Macro conditions matter too: Fed funds futures now fully price a December rate hike. Alphabet's next earnings report is expected around Feb. 3, 2027, when analysts forecast EPS of about $3.14. That report will give the first detailed 2027 capex plan and show whether Cloud and TPU growth can justify the spending.

Wednesday's gain was modest, but it reflects the central question for Alphabet: whether its AI hardware and cloud momentum can outrun the cost of building it.