Google investors dumped the stock in after-hours trading on Wednesday, after the company missed expectations in most of its core businesses and revived long-standing questions about how and when its massive investments in AI infrastructure will pay off.

Shares in the firm’s parent holding company, Alphabet, sank 10 percent after market hours, following the company’s disclosures of its third-quarter figures.

Quarterly sales, excluding partner payouts, amounted to $111.2 billion (£83bn), with advertising revenue reaching $82bn.

Both figures missed analysts’ estimates, as did sales from search and related businesses.

Net income was $2.12 per share, far below the $2.99 expected by analysts, as equity investments, including a position in SpaceX, affected its bottom line.

In the second quarter, Google benefited from an equity windfall mainly driven by SpaceX’s IPO and an investment in a private company that was reportedly identified as Anthropic.

Google said in July that its capital expenditures would reach $205bn this year, more than double last year’s spending, with most of the expenditures going to AI infrastructure such as data centres.

But even as Google heavily promotes AI results to users, the company told analysts on a Wednesday call that AI Mode queries are seeing “lower monetisation”, restricting the company’s search-related revenue growth.

Google’s free cash flow declined from negative $5.85bn in the second quarter to negative $9.06bn, while at the end of the quarter its future purchase commitments and pre-commencement leases and other obligations amounted to more than $1tn.

The disappointing figures eclipsed the strong growth of Google Cloud, which saw revenues expand by 103 percent year-on-year.

The company’s chief Sundar Pichai told analysts on the call that Google has “more models coming soon”, including models that would compete more effectively for the developer market.