A look at Google headquarters. Anadolu via Getty Images By Kendra Barnett --> The numbers $127.6 billion: Alphabet’s Q3 revenue, up 25% from $102.3 billion during the same period last year. Under analyst projections of $127.93 billion.
$96.3 billion: Revenues from Google Services, which includes advertising, subscriptions, digital content, and hardware. That’s up 11% year-over-year (YoY), attributed in large part to growth in the Google Search business. Ad revenues included $82 billion of the total, though that number was below analysts’ expectations of $83.5 billion.
$30.7 billion: Google Cloud revenue, up 103% YoY as the company’s AI infrastructure business booms.
$51.4 billion: Google’s capital expenditures for the quarter, spent primarily on AI infrastructure investments.
$2.12: Earnings per share, under analyst expectations of $2.99. The figure fell 26% due to an unrealized loss on Alphabet’s SpaceX stake, the company said.
Google’s parent company, Alphabet, reported third-quarter earnings Wednesday after the bell, a day after Google unveiled Genie 4, a realistic world model, and just hours after it debuted Gemini 4 Carbon, which the company bills as its “strongest model” yet. Google claims the AI system shows “significant gains” in agentic tasks and coding, as well as cybersecurity use cases including vulnerability detection.
While Google barrels ahead with AI growth, growth in its core search business slowed, rising at 12%, compared with 17% in the second quarter. Google’s chief business officer, Philipp Schindler, attributed the slowing rate to foreign exchange rates and one-off ad spend dips in Asia-Pacific among advertisers impacted by the EU’s elimination of its de minimis exemption on low-cost imports. He also flagged that while users are increasingly using Google’s AI-powered search experience, AI Mode, that system has fewer ads baked in and therefore makes less money.
“The strong growth in AI Mode queries had an impact [on decelerating Google Search growth] because of the lower monetization we are seeing in AI Mode,” Schindler said.
The fix? More ads in Google’s AI search experiences. Ad tests in AI Mode have returned “promising results,” Schindler said, and the company plans to scale ads in both AI Mode and AI Overviews to more users and across a wider range of queries. That includes expanding ads in AI Mode into international markets for the first time and launching multi-turn ads in AI Mode in the U.S. “To be clear, we feel very good about our trajectory here,” Schindler said, also noting that click-through rates for sponsored and organic product listings in AI Mode are “similar.”
It was another attempt from the tech giant to assure Wall Street that its original search business is alive and well, even while the product morphs into dynamic, integrated, AI-powered experiences that increasingly chip away at web publishers’ traffic. (Today, some publishers are railing against Google’s practice of using the same web crawler for both search indexing and AI by opting out of Google Search altogether . Others are suing Google for allegedly suppressing their ad revenues .) On Google’s second-quarter earnings call in July, CEO Sundar Pichai claimed AI search was “sending billions of clicks to websites every week.” Today, there was no mention of publisher traffic.
Search isn’t the only core area being overtaken by AI. Google leaders told investors that agentic commerce is an increasing focus for the business and noted tha…