The bill investors feared
Google lost as much as 10% of its market value after the publication of its quarterly results. According to The Decoder, the decline reflects the fear, long held by investors, that artificial intelligence will erode the search engine's profitability. Search revenue grew by around 12% in the third quarter, below the 15% expected by analysts. The source stresses that this is slightly below expectations but in line with recent years, and that Google has only just begun to monetize AI Mode.
The confirmation from the conference call
During the results call, executive Philipp Schindler stated that the strong growth in AI Mode queries had an impact because of lower monetization, among other factors. The company nevertheless said it was satisfied with the overall trajectory and reported that the annual growth rate of queries had reached its highest level in five years. Google also announced its intention to extend the advertising program for AI Mode in the United States and internationally, a step that the source describes as the start of monetization of this mode. It remains to be seen how much this expansion can offset the revenue gap per query compared with traditional search: the material does not offer estimates on this.
Cloud and infrastructure: the growth that balances the books
The clearest signal comes from cloud, whose revenue more than doubled year over year to $30.7 billion, with growth of 103%. Google is spending accordingly: capital expenditure reached $51.4 billion in the third quarter alone, with a 2026 forecast confirmed at between $195 billion and $205 billion and a significantly higher expected figure for 2027. Thomas Kurian, head of cloud, expects further growth thanks to AI agents in production, which require more computing power, more space for agent memory, and more database capacity for reasoning. The company aims to earn from both consumer products and the infrastructure used by other enterprises, but it has not disclosed the profit margin on sales of TPU systems to external customers, despite repeated questions.
Gemini and the new Carbon model
CEO Sundar Pichai said that the Gemini app had reached one billion users, making it the fastest-growing product in the company's history. The source observes that the figure is not surprising, since it is essentially an extension of search. Google's model APIs process almost 32 billion tokens per minute, more than four times the level a year earlier; according to the source, part of this jump probably reflects token inflation caused by reasoning models and agentic workflows, not only increased usage. Pichai also indicated that the company is building smaller, distilled versions of the new Carbon model to balance quality and response speed, to be offered to billions of users through an always-on cloud runtime, while the full model will initially be reserved for selected cybersecurity experts and the U.S. government.
The emerging picture is that of a company compensating for the slowdown in search with cloud and infrastructure, while AI monetization remains the variable to be verified in the coming quarters.
