Alphabet's quarterly revenue of $111.2 billion falls short of expectations, dropping 7.9% after hours

Google’s parent company, Alphabet (GOOG.US), reported quarterly revenue and profit that both fell short of market expectations, indicating that the company has not yet generated sufficient returns from its artificial intelligence business to justify its massive investments. Alphabet stated that for the three months ending September 30, revenue excluding partner payouts reached $111.2 billion, and net profit per share was $2.12, both below Wall Street’s forecasts. Google is racing to build AI infrastructure for itself and its clients, pushing capital expenditures to record highs. These investments have helped Google become a top provider of computing power to artificial intelligence companies such as Anthropic and Meta. Google is also independently developing AI models and integrating them into consumer products like its search engine, YouTube, and Gmail. However, relative to the scale of its expenditures, these efforts have not yet delivered proportional returns. Alphabet’s share price dropped as much as 7.9% in after-hours trading.