YouTube Ad Revenue Rises as Alphabet Misses Estimates and Shares Fall

Alphabet entered its October 28 earnings report facing a skeptical Wall Street. CNBC Technology reported ahead of the release that investors were looking for signs of strength amid a shaky AI trade.

The test extended beyond YouTube's advertising business. Investors were also focused on whether Alphabet could protect its search business as AI changed how people find information, according to Bloomberg Technology.

On October 28, Alphabet reported third-quarter revenue of $127.6 billion, below investor expectations, according to Forbes. NYT > Technology reported that revenue rose 25%, but that growth still fell short of what investors had anticipated.

YouTube's advertising revenue increased 9% to $11.2 billion in the third quarter of 2026. That was slower growth than in recent quarters and below Alphabet's overall growth rate, according to Variety Movies.

The disappointment also reached the bottom line. Bloomberg Technology reported that both quarterly sales and profit missed estimates. NYT > Technology attributed the profit decline to changes in the value of Alphabet's investments.

Spending added another source of pressure. Business Line - Home reported that rising infrastructure costs and weaker than expected advertising revenue weighed on Alphabet, even as its cloud business expanded rapidly.

Alphabet shares fell 8% in after-hours trading following the results, according to Deadline Hollywood. Business Line - Home reported a decline of more than 10% after the earnings miss. The supplied coverage does not establish whether those figures reflect different trading moments.

YouTube is still bringing in more advertising money, but its slowing growth did not prevent a broader earnings disappointment. The platform's 9% increase contrasts with Alphabet's 25% revenue growth, as reported by Variety Movies and NYT > Technology.

The financial pressures have separate causes. NYT > Technology linked falling profit to investment valuation changes, while World News CNA reported worsening cash burn. Business Line - Home connected cash pressure to AI spending and rising infrastructure costs.

The open questions are whether advertising growth strengthens and whether rapidly expanding cloud operations can help offset infrastructure costs. Business Line - Home identified both weaker than expected advertising revenue and rising costs as pressures in this quarter.

Search remains another focus. According to Bloomberg Technology, investors are watching whether Alphabet can defend that business as AI changes how people find information. The supplied coverage gives no timetable for resolving that question.