Alphabet Shares Fall 12% Following Mixed Third-Quarter Earnings and Search Slowdown
Alphabet (GOOGL) experienced a significant market sell-off, with its stock falling 12% after reporting third-quarter revenue of $127.6 billion, slightly missing analyst expectations. While the company saw impressive 25% overall revenue growth and record-breaking Cloud revenue growth of 103%, these gains were offset by a slowdown in core Google Search revenue growth, which rose only 12%. Investors reacted negatively to concerns regarding search monetization as users increasingly shift toward AI chatbots. Additionally, Alphabet reported a $9 billion free cash flow loss, driven by massive planned capital expenditures of up to $205 billion for AI infrastructure. Despite the volatility, management maintains that query growth is at a five-year high and expects new advertising models within 'AI mode' to drive future monetization.
Topics: AI Competition Alphabet Earnings Google Cloud Growth Search Revenue Slowdown