Alphabet posts revenue growth but AI spending drives cash outflow, shares tumble
Alphabet announced third-quarter results in Mountain View, California, noting a 25% year-over-year revenue increase to $128 billion, but saying AI-powered search delivered lower ad earnings and produced a free-cash-flow deficit of roughly $9 billion, which pushed its shares sharply lower. Earlier reports showed the company’s revenue of $127.
58 billion beating estimates while free cash flow fell short of expectations, and analysts highlighted that AI-related capital spending was accelerating. Subsequent analyses linked the slowdown in AI-search monetization to a 25% drop in net income and a near-10% plunge in the stock as advertisers adjusted to changes in search.