YouTube Ad Revenue Rises 9% But Parent Alphabet Misses Wall Street’s Q3 Targets; Stock Drops

YouTube ad revenue grew 9% in the third quarter to hit $11.2 billion, but parent Alphabet‘s stock dropped after overall financials undershot Wall Street expectations. Shares in Alphabet fell 8% in after-hours trading on the earnings news. Total revenue of $127.6 billion increased 25% over the year-earlier quarter, marking a 13th consecutive quarter of double-digit gains, but slightly undershot analysts’ consensus forecast of $127.8 billion. Earnings per share represented a much bigger miss, coming in at $2.12 compared with analysts’ outlook of $3.01. The financial report followed the release of the company’s latest frontier AI model, Gemini 4 Carbon. Along with Big Tech peers like Meta, Microsoft, Nvidia and Amazon, Alphabet is being scrutinized by Wall Street as investors look for returns on massive AI infrastructure spending. Watch on Deadline CEO Sundar Pichai called the July-to-September period a “strong quarter,” noting in the earnings release that the company is on track to record a half-trillion-dollars in total annual revenue. He also said the app for the company’s Gemini AI model has hit 1 billion users, making it “the fastest-growing product in Google’s history.” Alphabet has surpassed 150 million YouTube Music and Premium subscribers globally, including trials, Pichai revealed. The total is up from 125 million as of March 2025. YouTube’s ad growth comes as the platform continues to gain ground as a destination for viewing in the living room. In September, according to Nielsen, it accounted for almost 16% of all viewing via TV screens in the U.S., nearly doubling Netflix’s market share. On the pay-TV side, YouTube TV has grown into a leading operator, with industry veterans and even close rivals conceding they will soon become the No. 1 provider in the U.S.