Google admits AI search makes less money, but it's fixing that with more ads

Alphabet reported Q3 2026 revenue of almost $128 billion, up 25 percent year over year, but net income fell nearly $9 billion and earnings per share came in at $2.12 versus an expected $3.02, sending the stock down almost 12 percent. The company admitted AI search isn't earning as much as organic search, yet still expects to spend even more on AI next year. Google Cloud beat expectations, crossing $30 billion in revenue.