Alphabet earnings miss first real sign that AI is taking a bite out of search

Alphabet's search and other segment revenue grew 12% year over year to roughly $63 billion but missed estimates for the second straight quarter, even as Google said search query growth was the strongest in five years. Search revenue growth slid from 19% in the first quarter to 17% in the second and 12% in the third, while cloud revenue more than doubled to nearly $31 billion with backlog around $560 billion. Alphabet maintained its 2026 capex forecast of $195 billion to $205 billion and said spending will increase significantly in 2027.