Google said revenue from search and other businesses rose 11% to $44B, and YouTube advertising revenue rose 12% to $7.9B. The management attributed weaker-than-expected cloud sales to client optimization. On the other hand, forward investments focused on AI are impacting margins and operating income. "As 3Q23 revenues were broadly in line while operating income was below the consensus, we expect shares to trade lower," Citi analysts wrote in a client note. Bernstein analysts said that in order for GOOGL stock to outperform, the bulls tend to highlight two specific drivers: 1) Cloud-taking share offering further AI re-rating, and 2) visible margin expansion. "Suddenly, both of those bull cases feel very distant," they wrote. Several Wall Street analysts lowered their price targets on GOOGL stock in response to the Q3 earnings report.