Alphabet's AI search drags revenue as Google plans more ads

arstechnica.com —

Alphabet reported Q3 revenue of nearly $128 billion, but Google's stock fell nearly 12% after admitting AI search generates less revenue than traditional search and cash flow worsened to -$9.06 billion. Earnings per share hit $2.12, missing analyst projections of $3.02, while search growth slowed to 12% year-over-year from 17% in Q2. Google plans to expand AI Mode ads internationally and introduce multi-turn ads in the US to boost revenue. Capital expenditures reached $51.4 billion in Q3, with 2026 spending projected at $195-205 billion and over $300 billion targeted for 2027. Cloud revenue doubled to $30 billion, but reliance on venture-funded AI startups poses risks if funding declines.


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