Google's third-quarter search revenue grew about 12%, below analysts' expectation of 15%, and some investors believe the problem of AI search queries growing fast but having low monetization capacity is beginning to show. Executive Philipp Schindler said on the earnings call that the strong growth of AI Mode queries affected revenue due to the lower level of monetization. In the same period, cloud business revenue grew 103% year over year to $30.7 billion, and the Gemini app reached 1 billion users.
Google's third-quarter search revenue grew about 12%, below analysts' expectation of 15%, and some investors believe the problem of AI search queries growing fast but having low monetization capacity is beginning to show. Executive Philipp Schindler said on the earnings call that the strong growth of AI Mode queries affected revenue due to the lower level of monetization. In the same period, cloud business revenue grew 103% year over year to $30.7 billion, and the Gemini app reached 1 billion us
After Alphabet released its earnings, its stock plunged more than 11% in a single day, wiping out about $500 billion in market value, because AI spending continues to devour cash flow, share buybacks fell to zero in the first nine months of 2026, and revenue growth in the core search business slowed from 16.8% in the second quarter to 12%. Google Cloud revenue doubled year over year to $30.7 billion, with its profit margin rising to 36.2%, but the shared AI research and development loss widened from $4.5 billion to $7.7 billion, and about half of the cloud business's profit increment was consumed before consolidation. JPMorgan called this earnings report a setback for the re-ignition of the AI/tech trade, while Goldman Sachs trader Thales Arruda said the market is shifting from rewarding capital expenditure growth to demanding evidence of returns.
After Alphabet released its earnings, its stock plunged more than 11% in a single day, wiping out about $500 billion in market value, because AI spending continues to devour cash flow, share buybacks fell to zero in the first nine months of 2026, and revenue growth in the core search business slowed from 16.8% in the second quarter to 12%. Google Cloud revenue doubled year over year to $30.7 billion, with its profit margin rising to 36.2%, but the shared AI research and development loss widened
Meta's advertising business is narrowing its revenue gap with Google Search, with quarterly revenue now differing by only about $4 billion. AI has increased Meta's ad delivery volume by 14% and raised prices by 12%, because it can better predict users' needs before they search.