Alphabet (GOOGL, Financial), the parent company of Google, is set to announce its fourth-quarter earnings after the market closes on Tuesday, February 4.
The stock has surged over 30%over the past year, driven by optimism around artificial intelligence (AI) integration in its Search and Cloud businesses, as well as growth in YouTube. Analysts project Alphabet's Q4 earnings per share (EPS) at $2.13, marking a 30% year-over-year increase. Revenue is expected to rise 12% to $96.68 billion.
The company has beaten analysts' earnings estimates for seven consecutive quarters. Analyst Expectations and Outlook Bernstein analyst Mark Shmulik raised his price target on Alphabet to $210 from $185 while maintaining a Hold rating. He noted steady 11% growth in Google Search but flagged potential foreign exchange headwinds. Shmulik also pointed to YouTube's acceleration, aided by political ad spending and connected TV (CTV) growth. While AI-driven Cloud expansion is a positive, he cautioned that any slowdown in Cloud revenue could weaken the bullish case for the stock.
KeyBanc analyst Justin Patterson reaffirmed his Buy rating with a price target of $225, citing Alphabet's strong product innovation in AI and quantum computing. Despite concerns over regulatory risks, particularly the Department of Justice (DoJ) trial on Google Search, Patterson highlighted Alphabet's strength in Google Cloud, Waymo, and profit margins. Alphabet's earnings report will be closely watched for insights into AI adoption, advertising trends, and Cloud revenue growth.
