:max_bytes(150000):strip_icc()/GettyImages-2166671480-b15158c79cbd42a6b2ef8c1b7f160b9a.jpg "Alphabet Stock: Analyst Predictions Before Earnings")
Alphabet’s Q1 Earnings: AI adn Antitrust in Focus
Mountain View, CA — Google parent Alphabet (GOOGL) is set to release its first-quarter earnings report after market close on Thursday, and Wall Street analysts are largely optimistic about the tech giant’s capacity to navigate current economic headwinds.However, regulatory challenges and increasing competition in the artificial intelligence sector could temper investor enthusiasm.
Analysts Forecast Growth Driven by AI
Despite a volatile market, several investment firms have signaled confidence in Alphabet’s long-term prospects, especially its advancements in artificial intelligence.Citi analysts have projected that Google Search would be “among the last platforms to experience macro impacts and among the first to recover.” They also emphasized the growth potential stemming from the adoption of AI tools like Google’s AI Mode in Search, as well as the latest iteration of the company’s Gemini large language model.
Morgan Stanley echoed this sentiment, citing “AI-driven platform-level innovation” on Search and YouTube as a reason for “confidence in the durability of long term growth.”
citi and Morgan Stanley have set price targets for Alphabet at $195 and $185, respectively. Of the 19 analysts covering Alphabet tracked by Visible Alpha, 14 have “buy” or equivalent ratings for the stock, with the rest issuing “hold” ratings. Thier consensus price target near $195 would suggest roughly 29% upside from Thursday’s closing price at about $151.
Antitrust Ruling Looms Over Earnings Call
Beyond the financials, Alphabet is likely to face scrutiny regarding its legal battles. During the company’s earnings call, Alphabet could face questions from analysts about a U.S. District Court ruling that Google has illegally maintained monopolies in the online advertising industry.
The Justice Department has argued that Google’s dominance in search and advertising has stifled competition and harmed consumers. The company is currently appealing the ruling. citi analysts said they “wouldn’t be surprised to see Google ultimately spin off its ad network,” consequently of the ruling, but that Google’s core businesses would likely not be as impacted.
A potential spinoff could reshape the digital advertising landscape, creating opportunities for smaller players to gain market share. Though, it could also lead to increased regulatory oversight and potential disruptions to Google’s existing business model.
Financial Expectations and Market Performance
Analysts anticipate that Alphabet will report fiscal first-quarter revenue of $89.22 billion, up 11% year-over-year, and net income of $24.71 billion, or $2.01 per share, up from $23.66 billion, or $1.89 per share, a year ago.
Despite the positive outlook, Alphabet’s stock performance has been lackluster this year. Shares of Alphabet have lost a fifth of their value so far in 2025 through Thursday’s close. The U.S. stock market was closed Friday in observation of Good Friday.
Several factors could be contributing to the stock’s underperformance, including broader market volatility, concerns about rising interest rates, and increased competition from other tech companies. However,some analysts believe that the stock is undervalued and that the company’s long-term growth potential remains strong.
Counterargument: AI Hype vs. Reality
While manny analysts are bullish on Alphabet’s AI initiatives, some critics argue that the company’s investments in this area have yet to translate into significant revenue growth. They point to the high costs associated with developing and deploying AI models and the uncertainty surrounding the long-term return on investment.
Moreover, the rapid pace of innovation in the AI sector means that alphabet faces constant pressure to stay ahead of its competitors. Companies like Microsoft, Amazon, and OpenAI are all aggressively pursuing AI progress, and there is no guarantee that Google will maintain its lead in this area.
Alphabet’s Diverse Portfolio
Alphabet’s strength lies in its diverse portfolio of businesses beyond google Search. YouTube continues to be a powerhouse in online video, while Google Cloud is steadily gaining ground in the cloud computing market, directly competing with Amazon Web Services (AWS) and microsoft Azure. Verily,Alphabet’s life sciences division,is also making strides in healthcare technology,developing innovative solutions for disease detection and prevention.
| Segment | Description | Key Products/Services |
|---|---|---|
| Google Services | Core internet products | Search, YouTube, Ads, Android, Maps, google Play |
| Google Cloud | Cloud computing platform | Compute Engine, Cloud Storage, data analytics, AI/ML |
| Other Bets | Venture capital and experimental projects | Verily (life sciences), Waymo (autonomous driving), Wing (drone delivery) |
FAQ: Alphabet’s Earnings and Outlook
- What are analysts expecting from Alphabet’s Q1 earnings?
- analysts anticipate revenue of $89.22 billion and net income of $24.71 billion, or $2.01 per share.
- How is Alphabet positioned in the AI race?
- Analysts cite Alphabet’s “AI-driven platform-level innovation” as a key driver of long-term growth,particularly within Search and YouTube.
- What are the potential impacts of the antitrust ruling on Google?
- Citi analysts suggest that Google might spin off its ad network as a result of the ruling, but its core businesses are unlikely to be significantly impacted.
- what are the main risks facing Alphabet?
- Risks include market volatility,rising interest rates,increased competition in the AI sector,and potential regulatory challenges related to antitrust concerns.
- What are Alphabet’s key growth areas?
- Key growth areas include AI-powered search, YouTube, Google Cloud, and its “Other Bets” segment, which includes innovative projects like Waymo and Verily.
