GoKawiilAlphabet Q3 revenue up 25% but stock drops 12% as search growth slows and AI costs rise
Alphabet reported nearly $128 billion in Q3 2026 revenue and over $26 billion in net income, up 25% year-over-year but with earnings per share of $2.12, well below the $3.02 analysts expected. Chief Business Officer Philipp Schindler noted search volume grew 12% year-over-year, down from 17% in Q2 and 19% in Q1, with search revenue flat, while Google Cloud topped $30 billion, beating forecasts.
GoKawiil's interpretation of the reporting above, not reported fact.
The slowdown in search growth alongside flat search revenue suggests that Google's shift toward AI-powered search results may be generating less ad revenue per query than traditional organic search, a concern Google itself has acknowledged. Investors' sharp sell-off indicates markets may be worried that heavy AI spending plans for next year could further pressure margins before new revenue streams, like ads in AI search, materialize.
- Alphabet's Q3 revenue rose 25% to nearly $128 billion, but earnings per share missed Wall Street estimates by a wide margin.
- Search volume growth has decelerated for three straight quarters, falling to 12% from 19% a year earlier, with search revenue flat.
- Google Cloud revenue topped $30 billion, exceeding analyst expectations, even as the stock fell nearly 12% after the report.
Source: arstechnica.com, 2026-10-29
Published there as: “Google admits AI search makes less money, but it's fixing that with more ads”
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