GoKawiilAlphabet stock falls over 10% as AI search monetization lags behind traditional ads
Alphabet's shares dropped more than 10% in after-hours trading after earnings of $2.12 per share missed estimates of $3.01, even as quarterly revenue rose 25% to $127.6 billion. Executives said Google's AI Search mode generates less ad revenue per query than classic search, and capital expenditure more than doubled year over year to $51.4 billion, pushing free cash flow negative.
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The results suggest that heavy AI infrastructure spending is outpacing the revenue AI products currently generate, raising questions investors may have about when, or whether, that spending will pay off. CEO Sundar Pichai framed the spending as part of a long-range strategy rather than a short-term bet, while chief business officer Philipp Schindler pointed to AI Mode's lower monetization as a factor slowing search growth, a tension that could shape how other tech giants justify their own AI investments.
- Alphabet shares fell over 10% after missing earnings estimates despite 25% revenue growth.
- Capital expenditure more than doubled to $51.4 billion, with free cash flow turning negative.
- Executives said AI Search mode earns less per query than traditional search, slowing overall growth.
Source: techspot.com — Rob Thubron, 2026-10-29
Published there as: “Alphabet shares plunge over 10% as Google's AI search struggles to make money”
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