Google's AI Summaries Cut Ad Revenue, Sending Stock Down 13%

Google's AI Mode is cutting into its traditional search advertising revenue, causing the company to miss earnings expectations and its stock to plunge 13% on Thursday, erasing over $500 billion in market value. Google's search advertising generated $63.4 billion in Q3 2026, up 12% year over year, but fell $1.6 billion short of Wall Street's forecast of 15% growth. Chief business officer Philipp Schindler said AI-generated responses have made results harder to monetize. Capital expenditure jumped from $44.9 billion in Q2 to $51.3 billion in Q3, with Q4 expected to reach $73 billion. Google also has future data center and energy commitments exceeding $1 trillion, with no clear path to profitability beyond Gemini subscriptions.