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Google is rolling out advertisements within AI Mode search results to Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines, and Singapore, with Brazil, Mexico, and the UK to follow later this year. In the US, Google is introducing 'multiturn' ads that can appear across follow-up queries, not just the initial search.
Alphabet shares suffered their worst single-day decline on record after investors reacted negatively to the company's latest quarterly results. The selloff wiped out roughly half a trillion dollars in market capitalization in one trading session.
Alphabet shares fell sharply after Q3 earnings showed its AI Mode search feature generates less revenue than traditional search, even though overall search revenue rose 12% year-over-year to $63.25 billion. At its lowest point, Alphabet lost roughly $524 billion in market value, the second-largest single-day loss for a US-listed company ever, behind only Nvidia's drop in January 2025. Bespoke Investment Group noted it marks Alphabet's steepest post-earnings decline since going public in 2004.
In the quarter ending September 2026, Google Search generated $63.4 billion of Alphabet's $128 billion total revenue, or 49.7%. This marks the first time Search has fallen below 50% of revenue since Alphabet began breaking out the figure separately, down from a range of 52.8% to 62.0% over the prior 31 quarters.
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.
On Thursday's CNBC Investing Club 'Morning Meeting,' Jim Cramer said indiscriminate selling following Alphabet's revenue miss and Microsoft's otherwise strong quarter had created buying opportunities in quality tech names. He also discussed Eli Lilly's record-high shares after a strong earnings beat driven by obesity-drug demand, and noted FedEx had raised its full-year earnings outlook despite a softer near-term forecast.
Alphabet's stock dropped more than 11 percent on Wednesday, erasing over $500 billion in market value, after the company reported that its AI Mode search feature generates less revenue than its traditional text-link search ads. Google's Q3 revenue rose 25 percent year-over-year to $127.6 billion, but search revenue growth slowed to 12 percent from 14.5 percent a year earlier, even as capital expenditures on AI more than doubled to $51.4 billion. Chief business officer Philipp Schindler attributed the softer search growth to 'lower monetization' in AI Mode, according to Search Engine Land.
Alphabet reported quarterly results in which Google search revenue came in below Wall Street expectations, raising concerns about competitive pressure from AI chatbots. The company also posted negative free cash flow for the period, and shares are on track for a significant post-earnings decline.
In quarterly earnings, Microsoft lowered its fiscal-year capex guidance to $170 billion from $175 billion, while Alphabet kept its $195-205 billion range unchanged. Both companies cited supply delays from third-party GPU providers, with Microsoft CFO Amy Hood saying some capacity won't be available until the first half of 2027, and Alphabet's CFO noting outside computing power only came online late in the quarter.
Alphabet stock fell more than 10% in premarket trading after the company posted its first simultaneous EPS and revenue miss since late 2022, driven by Search revenue falling short of forecasts for a second consecutive quarter. Google Cloud revenue more than doubled, with the CFO calling its TPU systems a 'meaningful contributor,' but that growth wasn't enough to offset investor worry over Search. Microsoft, by contrast, rose in premarket trading as Azure grew 48% to become its largest business, even as a lighter capex figure weighed on cloud-infrastructure stocks.
Alphabet reported search and other segment revenue grew 12% year-over-year to about $63 billion, missing analyst estimates for a second straight quarter even as the company said search query volume grew at its fastest pace in five years. Shares fell roughly 10% in after-hours trading after the company also posted negative free cash flow of $9 billion, triple what analysts expected. Executives attributed the revenue slowdown mainly to foreign exchange effects, which they said would weigh even more heavily next quarter.
Alphabet stock dropped about 10% in premarket trading Thursday, which would mark its worst post-earnings decline since going public in 2004 if it closes down more than 9.77%. The company posted negative free cash flow of $9.07 billion for the third quarter, far worse than the $2.70 billion shortfall analysts had expected, while keeping its full-year capital expenditure guidance at $195-205 billion. Microsoft, by contrast, rose nearly 4% after reporting $45.2 billion in capital spending, below analyst estimates, and free cash flow that fell 27% but stayed positive.