Google and Alphabet see revenue growth from AI but profit pressure continues
Alphabet's revenue increased 25% year-over-year to $127.6 billion in Q3 2026, driven partly by AI investments and growth in search queries. However, profit declined due to changes in investment values. Google is expanding AI-powered Search ads globally amid slowing core ad growth but struggles to monetize AI Mode searches profitably after large infrastructure investments.
Why it matters
Alphabet's financial results reflect the challenges of balancing AI investment costs with monetization, a key factor for sustaining their AI innovation lead.
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