Investing.com -- Google parent Alphabet (NASDAQ:GOOGL) Inc Class C (NASDAQ:GOOG) shares fell more than 5% in after-hours trading after weaker than expected gains in revenue from its cloud computing operation.
The company reported third quarter earnings of $1.55 a share on revenue of $76.7 billion. Both measures beat expectations for profit of $1.46 a share on revenue of $75.9 billion.
Overall, revenue was up 11%. Cloud revenue rose 22% to $8.4 billion but was short of expectations for $8.6 billion.
Google said revenue from search and other businesses rose 11% to $44 billion, and YouTube advertising revenue rose 12% to $7.9 billion.
Alphabet CEO Sundar Pichai said: "I'm pleased with our financial results and our product momentum this quarter, with AI-driven innovations across Search, YouTube, Cloud, our Pixel devices and more. We're continuing to focus on making AI more helpful for everyone; there's exciting progress and lots more to come."
On a conference call after the report was released, Google executives said over 60% of the world's 1,000 largest companies are Google Cloud customers and that more than half of all funded generative AI start-ups are Google Cloud customers. They also said they were committed to reengineering the cost base to make room for AI investments to support long-term value.