Alphabet said on 28 October 2026 that it recorded a net loss of $8.7 billion on equity securities in the third quarter, against a gain of $10.7 billion in the same quarter of 2025. Its results release says the loss reduced net income by $6.7 billion and diluted earnings per share by $0.55.
The loss follows two quarters of large gains. Alphabet’s 10-Qs list net gains on equity securities of $36.9 billion in January to March 2026 and $99.0 billion in April to June, a combined $135.9 billion by our sum.
A vertical news Short narrated from the published headlines and opening lines of this piece and two related FourWeekMBA pieces on Alphabet.
Business Pill · Free Cash Flow
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The key insight: By our arithmetic from Alphabet’s filings, its net gains on equity securities in the first nine months of 2026, $127.3 billion, exceeded its $121.0 billion of income from operations, even after the third quarter’s $8.7 billion loss.
Update, 28 Oct: on the earnings call. On Alphabet’s third-quarter earnings call on 28 October, chief financial officer Anat Ashkenazi said other income and expenses was negative $8.2 billion “due primarily to unrealized loss from our investment in SpaceX from a decline in its stock price in the third quarter.”
The results release itself does not name the investee; the SpaceX attribution comes from the CFO’s remarks on the call. (Quotes from a caption transcript of the call webcast.)
The release puts the third-quarter loss on equity securities at $8,664 million. A footnote says it includes all gains and losses, realized and unrealized, and that the net effect of the loss decreased the provision for income tax by $1.9 billion, net income by $6.7 billion and diluted earnings per share by $0.55.
Other income and expense was a net loss of $8.2 billion in the quarter, against a net gain of $12.8 billion a year earlier. Diluted earnings per share were $2.12, against $2.87.
By our arithmetic, adding the disclosed $0.55 back to $2.12 gives $2.67. That is our calculation, not a figure Alphabet reports, and the year-earlier $2.87 itself included a $10.7 billion gain on equity securities.
Alphabet income from operations vs net gain (loss) on equity securities, per quarter, January 2025 to September 2026, $ billions. October to December 2025 is our arithmetic: full year minus the first nine months. Sources: Alphabet Q3 2026 results release (28 Oct 2026); Alphabet 10-Qs and 2025 10-K via SEC XBRL.
Two Quarters of Gains
Alphabet’s first-quarter 10-Q says the $36.9 billion gain was primarily related to unrealized gains on its non-marketable equity securities.
Its second-quarter 10-Q says the $99.0 billion gain was primarily related to unrealized gains in its equity securities portfolio from SpaceX and a private company. The same filing lists $80.0 billion of Space Exploration Technologies Corp. (SpaceX) shares subject to short-term restrictions on the ability to sell, and $14.1 billion of SpaceX shares subject to long-term restrictions through the third quarter of 2027.
The first-quarter 10-Q also says Alphabet committed in March 2026 to a $40.0 billion investment in a private company, consisting of a $10.0 billion capital commitment and $30.0 billion of future funding contingent on milestones. The filings we read do not name that company.
Bigger Than the Operating Business
By our arithmetic from the filings and the release, Alphabet’s net gains on equity securities for the first nine months of 2026 total $127.3 billion: $36.9 billion plus $99.0 billion minus $8.7 billion. Its income from operations for the same nine months was $121.0 billion, according to the release.
The release lists nine-month net income of $201.2 billion, against $97.7 billion in the first nine months of 2025.
The balance sheet shows the holdings growing: non-marketable securities of $135.2 billion at 30 September 2026, against $68.7 billion at 31 December 2025, and marketable securities of $208.8 billion, against $96.1 billion.
As we read the filings, the size of the swing comes from the first half: $36.9 billion of gains in January to March and $99.0 billion in April to June, against a loss of $8.7 billion in July to September.
Alphabet’s second-quarter 10-Q attributes most of that quarter’s gain to SpaceX and a private company; its third-quarter release gives no attribution for the loss.
The release footnote says fluctuations in the value of its investments could significantly contribute to the volatility of other income and expense in future periods.
Alphabet Form 10-Q, quarter to 30 June 2026
“primarily related to unrealized gains in our equity securities portfolio from SpaceX and a private company”
Three Implications
FOR READING ALPHABET’S EARNINGS The release says the third-quarter loss cut diluted earnings per share by $0.55; by our arithmetic, $2.12 plus $0.55 gives $2.67, which is not a figure Alphabet reports.
FOR THE BALANCE SHEET Non-marketable securities rose to $135.2 billion at 30 September 2026 from $68.7 billion at the end of 2025, according to the release.
FOR THE PRIVATE-COMPANY COMMITMENT Alphabet’s first-quarter 10-Q lists a $40.0 billion commitment to a private company, $30.0 billion of it contingent on milestones; the filings we read do not name the company.
The framework argues: “The job of any operator, investor, or builder is to know which layer they are operating inside and which layer the binding constraint is rotating toward next.”
Alphabet’s filings show it in two of those roles at once this year: an operator whose income from operations reached $121.0 billion in nine months, and an investor whose equity holdings moved its results by more. The framework does not discuss these figures.
What Is Not Established
Alphabet’s third-quarter release does not say which holdings produced the $8.7 billion loss. Its third-quarter 10-Q was not on SEC EDGAR when we checked on 28 October 2026, so the release alone does not attribute the loss to SpaceX or to any other company; the attribution comes from the CFO’s remarks on the earnings call (see the Update above).
The release does not say how much of the loss was realized rather than unrealized. The October to December 2025 figure in our chart is our arithmetic from the 2025 10-K and the 10-Qs.
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By our sum, Alphabet’s net gains on equity securities in the first nine months of 2026, $127.3 billion, exceeded its $121.0 billion of income from operations. In the third quarter the line turned to an $8.7 billion loss, which cut diluted earnings per share by $0.55, according to the release.
A note on sourcing. Figures come from Alphabet’s third-quarter 2026 results release of 28 October 2026 (SEC Form 8-K, Exhibit 99.1), its Forms 10-Q for the first two quarters of 2026 and, for earlier quarters, SEC XBRL data. Sums, differences and the earnings-per-share figure excluding the disclosed effect are our arithmetic; linked earlier pieces carry their own sources.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
