Google Search Revenue Grew 17% Last Quarter, Down From 19%. It's the First Slowdown in a Year.

AI is supposed to help businesses accelerate. But Google search just grew slower than the quarter before. And -- judging by the headlines about the earnings report -- almost nobody noticed.

Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) second-quarter report this week buried the figure under two louder storylines -- a $99 billion paper gain on its equity stakes, and another increase in capital spending plans, to a range topping out at $205 billion this year. The market reacted to the spending, sending shares down about 7% on Thursday.

But I'd argue the Search number deserves more attention than either. Google Search & other revenue, the biggest single line in Alphabet's business, grew 17% year over year to $63.3 billion. In the first quarter, it grew 19%.

And with investors increasingly asking how much of Google's core franchise AI (artificial intelligence) chatbots could eventually take, a Search slowdown is the number the bears have been waiting for. So it's worth being precise about what happened.

Image source: Getty Images.

The end of a four-quarter streak

Search had been on a remarkable run of acceleration. Its year-over-year growth rate went from 10% in the first quarter of 2025 to 12% in the second quarter, 15% in the third, 17% in the fourth, and 19% in the first quarter of 2026. That's four consecutive quarters of speeding up. The second quarter's 17% snapped the streak.

To be clear, 17% is still a spectacular rate for a business generating more than $63 billion a quarter. Search's growth last quarter matched the fastest rate it posted in any quarter of 2025. This is a slowdown only in the sense that a very good number followed an even better one.

And the comparison math matters here. A year ago, Search was lapping 10% growth -- its softest quarter in the sequence. Last quarter, it was lapping 12%. Stack the two years together (17% on top of last year's 12%, versus 19% on top of 10%), and growth over the two-year period comes out to about 31% in both the first and second quarters of 2026. On that basis, Search didn't slow at all. The deceleration looks more like a tougher comparison than a change in demand.

Management's evidence points the same way.

"Our popular AI features are driving Search query growth," CEO Sundar Pichai said in Alphabet's second-quarter earnings release, adding that the Gemini app now has 950 million monthly active users. That's the opposite of what share loss to AI assistants should look like, at least so far.

The context around the number

The rest of the report makes the Search figure easier to carry. Alphabet's total revenue rose 24% year over year to $119.8 billion, the company's 12th consecutive quarter of double-digit growth. The company's cloud computing segment, Google Cloud, saw revenue accelerate to 82% growth, reaching $24.8 billion, and the segment's operating margin expanded to 35.6% from 20.7% a year earlier. YouTube ads grew 13% to $11.1 billion, and subscriptions grew 15%.

This is not a company leaning on one growth engine.

Of course, the bear case doesn't need this quarter to prove anything. The argument is about the next several years. If consumers gradually shift their questions from a search bar to AI assistants, the erosion could show up slowly, then all at once.

One decelerating quarter with a flat two-year trend isn't evidence that's happening. But the metric now has investors' attention, and the third quarter will lap a 15% comparison -- harder than last quarter's 12%. If the two-year math starts shrinking from 31%, that would be the earlier warning worth acting on.

I think the takeaway is this: the capital spending debate knocked the stock down, but the Search number is the one that decides if Alphabet's franchise is intact. This quarter, it held up better than the headline rate suggests. I'd keep owning the stock. Just watch the two-year math from here, because that's the version of this number that will be worth watching to see whether the AI worries turn out to be right.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.