Google admits AI search makes less money, but it's fixing that with more ads
Google's negative cash flow balloons to -$9.06 billion, and stock price tumbles following Q3 earnings.
Alphabet, the parent company of Google, revealed its Q3 financial results on Wednesday, marking a significant drop in stock price following the earnings report. The company attributed part of the underperformance to its new AI search feature, which is generating less revenue than traditional organic search. Despite this, Google anticipates increased investment in AI technology for the upcoming year.
Revenue for the quarter amounted to approximately $128 billion, with a net income of over $26 billion. However, these figures failed to impress investors, as revenue increased by 25% compared to the previous year, yet net income was $9 billion lower. The stock price suffered a substantial decline, plummeting nearly 12% from the time of reporting.
Analyst projections had anticipated higher earnings per share of $3.02, but Google reported $2.12. Despite this, Google's Cloud division surpassed expectations, achieving $30 billion in revenue, roughly $1 billion more than analysts had predicted.
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