Is Alphabet (GOOGL) Stock a Buy Ahead of Earnings Today?

TLDR

• Alphabet reports Q1 2026 earnings Wednesday after market close
• Revenue expected at ~$107 billion, up 19% year-over-year
• Google Cloud sales forecast to rise 47%, with operating income up 120%
• EPS expected to dip to $2.63 due to a tough year-over-year comparison
• Options traders are pricing in a 5.67% move in either direction post-earnings

Alphabet reports its first-quarter 2026 results today, April 29, after the bell. All eyes are on whether the company can justify its massive AI spending commitments.

Alphabet Inc., GOOGL

Alphabet has committed up to $185 billion in AI capital expenditure for 2026. That money is going toward its own infrastructure and its Google Cloud rental business. Every quarter now, the company has to show that bet is paying off.

Last quarter, it did just that. Google Cloud sales jumped 48% year-over-year in Q4 2025, with operating profit up a staggering 154%.

Wall Street is expecting more of the same. Analysts polled by FactSet forecast cloud segment revenue to rise 47% in Q1, with operating income expanding 120%.

Total revenue is seen coming in at around $107 billion, up 19% from a year ago.

EPS is expected to fall slightly to $2.63, down from last year. But that drop is largely a math problem — Q1 2025 included a one-time 62-cent-per-share non-cash boost from rising valuations in Alphabet’s VC portfolio. Strip that out, and the underlying picture looks more stable.

What’s Driving the Business

Advertising remains the engine. Ad revenue is expected to make up about 71% of total Q1 sales, coming in at $76 billion — up 14% year-over-year. Google Search and YouTube are the main drivers, while the third-party ad network continues to shrink.

Investors will also be watching how much cash is being returned. Dividends and buybacks are on the radar, particularly as CapEx ramps up.

Analyst Views Going In

Bernstein analyst Mark Shmulik reiterated an Outperform rating on Monday with a $900 price target. He expects a solid quarter, with Search and Cloud both supported by AI-driven demand. YouTube, he says, may be mixed but shouldn’t be a major drag.

Shmulik doesn’t expect any changes to CapEx guidance this quarter. He’s looking for more detail on AI product progress and any signs of operating expense savings.

He did flag one caution: at current levels, the stock may be fully valued.

GOOGL is up 118% over the past year and has gained 12% year-to-date.

Wall Street’s consensus is a Strong Buy, based on 26 Buy ratings and 5 Holds. The average price target sits at $387.68, implying about 12.6% upside from current levels.

Options traders are pricing in a 5.67% swing in either direction following the earnings release. That’s well above Alphabet’s average post-earnings move of 1.44% over the past four quarters — a sign that the market sees today’s print as a meaningful test.

Results are due after market close today, April 29.

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