Shares of Alphabet (NASDAQ:GOOGL) declined over 6% in pre-market trading on Wednesday due to disappointing growth in its cloud computing segment.

For the third quarter, Alphabet reported earnings of $1.55 per share and revenue of $76.7 billion, surpassing the projected earnings of $1.46 per share and revenue of $75.9 billion. Although total revenue increased by 11%, the cloud segment's revenue growth was below forecasts. It grew by 22%, reaching $8.4 billion, missing the anticipated $8.6 billion.

Google's revenue from search and other segments increased by 11% to $44 billion. Additionally, YouTube's ad revenue climbed 12%, amounting to $7.9 billion.

Management cited client optimization as the reason for the cloud segment's underperformance. They also highlighted that ongoing investments in AI are affecting profit margins and operating income.