Is Alphabet's Core Search Business in Trouble? Looking Past the Headline Revenue Growth Provides a Clear Answer.

Alphabet's Google Search revenue growth slowed to 12% year-over-year in Q3 from 17% in Q2, raising concerns about AI's impact on its core business. However, deeper analysis reveals strong engagement metrics with record query growth and longer, more detailed searches. The company is successfully monetizing AI features in Search and AI Mode, with user research showing comfort with ads on these surfaces. Meanwhile, Google Cloud Platform is emerging as a major growth driver, expected to surpass Search in operating income growth by 2027. The stock's valuation at under 19x forward earnings presents a buying opportunity for long-term investors.