Google admits AI search makes less money, but it's fixing that with more ads
Google’s negative cash flow balloons to -$9.06 billion, and stock price tumbles following Q3 earnings.
TL;DR
- Alphabet's Q3 revenue reached nearly $128 billion, with net income over $26 billion, but the stock price dropped significantly.
- AI search queries currently generate less revenue than traditional search queries, partly due to fewer and less valuable ads.
- Google plans to increase advertising in AI Mode, including multi-turn ads in the US, to improve monetization.
- The company reported a negative cash flow of -$9.06 billion in Q3, attributed to massive AI spending, with further significant AI investment planned for 2027.
- Search revenue growth has slowed, and a decline in cloud service spending or stalled search growth could pose future risks to Google.