Why Alphabet Stock Popped on Wednesday

Alphabet, Amazon, and Microsoft shares rose 4.1%, 7.1%, and 7% respectively, after Democrats won control of Congress, potentially leading to stricter data center regulations. Investors expect these tech giants to benefit from reduced competition and lower capital expenditures, boosting profits and cash flow. Amazon and Alphabet maintained high capex forecasts, while Microsoft reduced its guidance.

Alphabet (GOOGL) shares rose 5% on Wednesday, benefiting from a tech sector rally post-U.S. midterm elections. The company reported Q3 revenue of $127.6B, up 25% YoY, with Google Cloud revenue doubling to $30.7B. Despite growth, investment losses and regulatory fines impacted earnings.

Alphabet (GOOGL) plans a $15 billion investment in Malaysia over two years to expand Google's data centers and digital skills training. The project includes new campuses in Selangor and Negeri Sembilan, with completion dates in 2027 and 2028. The investment aims to boost Malaysia's computing capacity and infrastructure, supporting Alphabet's cloud and AI services growth.

US tech giants' shares surged on Wednesday after Democrats' midterm election sweep, with investors anticipating potential curbs on data-center construction. Amazon, Meta, Alphabet, Microsoft, and Apple gained between 2% and 7.4%, adding over $750 billion in combined market value. Democrats' opposition to data centers may slow construction, benefiting existing tech giants. Smaller players like Applied Digital and Iren saw declines on concerns about their expansion plans.

Google announced that schools using its K-12 software will lose access to Search unless they opt in to AI tools like Gemini. Critics, including Senator Bernie Sanders and Lina Khan, condemned the move as anticompetitive. Google defends the change as a response to educator feedback, offering more control and a 'Guided Learning' tool.

Alphabet (GOOGL) reported Q3 earnings of $2.12 per share, missing estimates, with net revenues of $111.21 billion. Google Cloud revenues surged 103% YoY to $30.7 billion, driven by AI demand. The company faces rising infrastructure spending and free cash flow pressures, with capital expenditures at $51.4 billion. Management highlighted AI growth and monetization opportunities, including the Gemini app reaching 1 billion users.