Alphabet Inc. Q3 2026 Earnings Recap

Alphabet’s shares fell 12.3% after earnings, suggesting investors focused on execution risks despite rapid growth—particularly Google Cloud’s capacity constraints as demand surges and the challenge of converting AI usage into monetization. The transcript highlights momentum, but offers limited detail on the financial outlook.

Key Takeaways

• Alphabet revenue grew 25% year over year; management cited a $0.5 trillion annual run rate.
• Google Cloud revenue grew 103%, driven by AI infrastructure and solutions, but the company said it is working to bring more capacity online to meet demand.
• Search query growth was the highest in five years, while queries in AI Mode were on average 3x longer than traditional searches; management said it is focused on building the experience before monetization.
• First-party model APIs processed nearly 32 billion tokens per minute, up 40% from last quarter and more than 4x a year earlier. The Gemini app reached 1 billion users.
• YouTube Music and Premium surpassed 150 million subscribers globally, including trials; Waymo now operates in 15 major U.S. cities.