Alphabet reported third-quarter revenue of $127.6 billion, up 25% from $102.3 billion a year earlier, roughly in line with the $127.9 billion analysts were expecting, according to consensus estimates from S&P Global Visible Alpha. Earnings tumbled to $2.12 a share from $2.87. The drop is due to an $8.7 billion paper loss on Alphabet’s equity investments, which trimmed its earnings by 55 cents per share. Meanwhile, operating income rose 30% from a year ago, but dipped slightly to $40.6 billion compared to $40.8 billion last quarter.

“We had a strong quarter and are now on a half-trillion dollar revenue run rate,” said Alphabet CEO Sundar Pichai in a statement. “Our deep full stack approach is driving momentum across the business, with Alphabet revenues growing 25% year-over year.”

In after-hours trading Wednesday, Alphabet’s stock dipped as low as 8%. 

As for capital spending, investors are eagerly awaiting the figure among all the hyperscalers as the sizzling race for AI compute has pressed companies to splash out $2 trillion in two years. Alphabet reported that capex was $51.4 billion in the third quarter, compared to $24 billion a year ago.

The third quarter results are Alphabet’s first full results since the tech giant announced it raised $84.8 billion in equity in June, including $10 billion from Berkshire Hathaway, to fund an AI buildout. The heavy spending has pushed Alphabet’s free cash flow into negative territory, clocking in at negative $9.1 billion, compared to negative $5.9 billion in the second quarter.

Melissa Otto, global head of Visible Alpha Research at S&P Global, wrote in a note that investors have worried that Google Cloud’s profit margin had peaked last quarter but it widened to 36.2%.