Key Takeaways
- Eli Lilly shares jumped over 5% on October 29, 2026, driven by robust demand for its GLP-1 drugs, propelling Q3 revenue up 39% to $24.4 billion.
- ServiceNow stock plunged over 26% after missing Q3 earnings per share estimates, reporting $0.27 against expectations of $0.35.
- Alphabets profitability was impacted by weaker advertising sales and a nearly $9 billion loss from venture capital stakes in firms like SpaceX and Anthropic.
Third-quarter earnings season delivered a stark contrast across sectors on October 29, 2026, with pharmaceutical giant Eli Lilly (LLY) posting significant gains while major technology players like ServiceNow (NOW) and Alphabet (GOOGL, GOOG) saw sharp declines following their Q3 reports. The divergence highlights varied consumer and enterprise spending trends alongside the influence of investment holdings on corporate profitability.
What Drove Eli Lilly’s Q3 Outperformance?
Eli Lilly shares surged 5.63% after the company reported strong third-quarter results, primarily fueled by overwhelming demand for its GLP-1 drugs, Mounjaro and Zepbound. The pharmaceutical firm’s revenue climbed an impressive 39% year-over-year to $24.4 billion, significantly surpassing analyst estimates of $22.6 billion. Adjusted earnings per share rose 7% to $7.48, well above the $6.35 anticipated by analysts.
Mounjaro sales alone increased 65% year-over-year to $10.7 billion, with Zepbound sales up 49% to $5.35 billion. CEO David Ricks attributed this growth to broad global consumer demand for these treatments, global launches of Foundayo, expanded U.S. coverage for obesity care, and a doubling of sales from new oncology, immunology, and neuroscience products. Eli Lilly consequently raised its full-year revenue guidance to a new range of $91 billion to $92 billion.
Why Did ServiceNow Shares Fall Despite Revenue Growth?
ServiceNow (NOW) stock plunged 26.35% after the enterprise software company missed earnings per share expectations for its third quarter. While revenue came in slightly above estimates at $4.1 billion against a forecast of $4.09 billion, adjusted EPS reached only $0.27, falling short of the $0.35 per share analysts had projected. The current remaining performance obligations (cRPO) grew by 20.5% year-over-year to $13.65 billion, and ServiceNow did raise its full-year 2026 subscription revenue forecast to between $15.78 billion and $15.79 billion.
Despite CEO Bill McDermott’s positive commentary, describing the quarter as an inflection point for the company’s role in enterprise intelligence and security, Wall Street reacted negatively to the earnings miss, indicating a high bar for growth and profitability in the software sector.
What Impacted Alphabet’s Profitability in Q3?
Alphabet (GOOG, GOOGL) shares dipped after the technology giant reported third-quarter earnings that missed revenue projections due to lower-than-anticipated advertising sales. The company posted earnings per share of $2.12 on revenue of $127.58 billion, falling short of analyst expectations for EPS of $3.01 on revenue of $127.93 billion. Revenue excluding traffic acquisition costs was $111.21 billion, slightly below the $111.29 billion anticipated.
Alphabet’s advertising segment generated $82.01 billion in sales, below estimates of $83.5 billion. Its cloud unit, however, outperformed, bringing in $30.71 billion against projections of $29.1 billion. A notable drag on profit came from Alphabet’s venture stakes in other companies, including approximately 14% of Anthropic (ANTH.PVT) and a portion of SpaceX (SPCX). A nearly $9 billion loss on these holdings cut earnings by $0.55 per share, contributing to the overall miss. SpaceX stock reportedly dropped about 12% during the quarter, while Anthropics potential IPO on November 16 could further impact valuation.
Other Key Earnings Reports: Crocs, Caterpillar, Chipotle
Beyond the major movers, Crocs (CROX) stock soared 25% to a two-year high as its HeyDude loafer brand returned to growth, with Q3 revenue increasing 6.1% to $170 millionits first sales increase in six quarters. HeyDude, acquired for $2.5 billion in 2022, represents 16% of Crocs’ total revenue.
Caterpillar (CAT) shares fell 11% in premarket trading despite reporting an earnings beat and a record order backlog of $78.1 billion. The industrial firm reported Q3 revenue up 17% to $20.7 billion and adjusted EPS of $7.20, beating estimates of $7.03. However, Wall Street had hoped for raised guidance, impacting the stock as industrial AI plays broadly faced pressure.
Chipotle (CMG) stock rose 2% after reporting better-than-expected Q3 earnings, with a 2.1% gain in same-store sales, exceeding the 1.5% anticipated. The restaurant chain posted adjusted earnings of $0.27 per share, slightly below estimates, but CEO Scott Boatwright noted positive comparable transaction growth for three consecutive quarters.
Analyst Perspective & Market Impact
The Q3 earnings season continues to demonstrate a significant divergence in market performance, heavily influenced by sector-specific tailwinds and pressures. Eli Lilly’s robust growth in the pharmaceutical sector, driven by its GLP-1 drug portfolio, reflects strong underlying consumer health demand and successful product launches. This contrasts sharply with the challenges faced by technology companies like ServiceNow and Alphabet, where investor expectations for rapid growth and profitability remain extremely high. Even a slight miss in earnings per share or a slowdown in key segments like advertising can lead to substantial stock price corrections. The S&P 500 has seen an overall earnings growth rate of 29.5% for Q3, marking a third consecutive quarter above 25%, yet this aggregate strength masks considerable performance disparities among individual companies and sectors. Investors are scrutinizing balance sheets for sustainable growth drivers beyond broad market trends.
| Company | Reported Revenue | Est. Revenue | Reported EPS | Est. EPS | Stock Change (Day) |
|---|---|---|---|---|---|
| Eli Lilly (LLY) | $24.4B | $22.6B | $7.48 | $6.35 | +5.63% |
| ServiceNow (NOW) | $4.1B | $4.09B | $0.27 | $0.35 | -26.35% |
| Alphabet (GOOGL) | $127.58B | $127.93B | $2.12 | $3.01 | -1.02% (^GSPC impact) |
| Caterpillar (CAT) | $20.7B | $20.7B | $7.20 | $7.03 | -11.00% (Premarket) |
| Crocs (CROX) | N/A | N/A | N/A | N/A | +25.00% |
| Chipotle (CMG) | N/A | N/A | $0.27 | $0.29 | +2.00% |
What do these diverse Q3 earnings signals mean for broader market sentiment and future sector rotation between healthcare and technology?
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