Alphabet search revenue growth slows amid AI transition

Alphabet reported a deceleration in growth for its core search business during the third quarter of 2026, despite a significant increase in user search queries. Revenue from Google Search and other properties grew by 12 percent year-over-year, a decline from the approximately 17 percent growth recorded in the second quarter.

The financial results, released on Oct. 28, 2026, showed that while search query volume reached its highest growth rate in five years, paid clicks on Google properties increased by only 8 percent. Following the release of these figures, Alphabet shares fell by approximately 12 to 13 percent.

During the company's earnings call, Google Chief Business Officer Philipp Schindler pointed to the lower monetization rates observed in the company's AI-integrated search features as a factor in the revenue slowdown. To address this gap, the company is testing new advertising placements within AI-generated answers in markets including Canada and Australia.

CEO Sundar Pichai noted that Alphabet reached a half-trillion dollar revenue run rate, with total company revenue growing 25 percent year-over-year to $127.6 billion. He attributed this performance to the company's full-stack approach across its business segments.