Alphabet’s third quarter was marked by strong revenue growth, with management attributing the momentum to increased adoption of artificial intelligence (AI) across Google Search, Cloud, and YouTube. CEO Sundar Pichai highlighted that AI-powered features such as Gemini and AI Mode are driving higher user engagement and accelerating query growth. The company also experienced notable gains in its cloud business, with enterprise customers increasingly adopting Google’s generative AI models. Management pointed to robust growth in paid subscriptions and improved monetization through new ad products as additional contributors to the quarter’s positive performance.

Is now the time to buy GOOGL? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Alphabet’s Q3 Earnings Call

• Brian Nowak (Morgan Stanley) asked about the monetization risks of agentic e-commerce and travel experiences. Chief Business Officer Philipp Schindler said these new formats are still early but are considered additive, and management is focused on creating value for both users and partners.
• Douglas Anmuth (JPMorgan) inquired about AI-driven query growth’s effect on monetization and cost controls. Schindler noted that AI Overviews are driving similar monetization rates as traditional search, while Ashkenazi highlighted ongoing efforts to optimize infrastructure and expenses.
• Eric Sheridan (Goldman Sachs) questioned the impact of custom silicon on operating efficiency and monetization. CEO Sundar Pichai stated that proprietary chips differentiate Google Cloud and help drive margin improvement, while Schindler described YouTube’s “twin engine” of ads and subscriptions as mutually reinforcing.
• Mark Shmulik (Bernstein) asked about differences in engagement across Gemini, AI Mode, and Overviews. Pichai explained that adoption patterns vary, with early adopters driving high engagement in new AI products, and Schindler reiterated that monetization in AI Overviews matches traditional formats.
• Michael Nathanson (MoffettNathanson) probed the effect of longer AI Mode queries on ROAS and internal capital allocation. Schindler said it is too early to detail performance impacts, while Ashkenazi described a rigorous investment evaluation process focused on long-term returns.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will focus on (1) the pace of AI product rollout and user adoption across Search, Cloud, and YouTube; (2) Alphabet’s ability to manage infrastructure investments and expense growth while maintaining profitability; and (3) progress in converting a growing cloud backlog into realized revenue. Execution in these areas will be critical to sustaining momentum and navigating margin pressures.

Alphabet currently trades at $275.40, in line with $274.98 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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