Alphabet (GOOGL) Stock: Why Analysts Expect Another Earnings Beat Today

TLDR

• Alphabet reports Q4 earnings on February 4, 2026, with analysts expecting EPS of $2.63 and revenue of $111.3 billion, up 15% year-over-year
• Google Cloud sales projected to hit $16.2 billion with 35% growth and operating margins expanding to 22.7% from 17.5%
• Alphabet stock has surged 81% in the past six months after the successful Gemini 3 AI model launch restored competitive positioning
• Google maintains nearly 90% search market share through AI overviews feature that summarizes results at the top of searches
• Analysts expect 2026 capital expenditures around $116 billion as the company expands AI data center capacity to meet demand

Alphabet prepares to unveil its fourth quarter 2025 results on Wednesday afternoon. Wall Street expects the tech giant to deliver earnings-per-share of $2.63 on revenue of $111.3 billion.

Alphabet Inc., GOOGL

The numbers represent a 23% jump in earnings and 15% revenue growth compared to last year. Alphabet has beaten earnings estimates in all nine previous quarters.

The Cloud Business Takes Center Stage

Google Cloud stands out as the star performer heading into earnings. Analysts project sales will reach $16.2 billion, marking a 35% increase year-over-year.

More impressive is the margin expansion. Operating margins are expected to climb to 22.7% from 17.5% a year ago.

The cloud unit benefits directly from the AI boom. Companies need massive computing power to run AI models. Google rents out servers in its data centers to meet that demand.

Alphabet poured roughly $90 billion into capital expenditures during 2025. Most of that money went toward building more AI infrastructure.

Analysts think the company will spend even more in 2026. The consensus estimate sits at $116 billion for next year’s capex.

Microsoft already dropped $72 billion on infrastructure in just six months. Meta, which doesn’t even operate a cloud business, plans to spend between $115 billion and $135 billion in 2026.

Search Business Holds Strong

A year ago, Google looked vulnerable. ChatGPT had caught the company flat-footed. Competitors released better AI models.

That narrative has flipped. The Gemini 3 models launched in November finally matched OpenAI and Anthropic’s capabilities.

AI overviews proved crucial for search. These AI-generated summaries appear at the top of traditional search results. The feature helped Google maintain its nearly 90% market share.

About three-quarters of Alphabet’s revenue still comes from advertising. Ad revenue is expected to grow 13% this quarter. Search leads the way.

YouTube and display advertising continue performing well. The advertising foundation remains solid.

Alphabet stock has climbed 81% over the past six months. Over the past year, shares are up more than 64%.

Roth MKM analyst Rohit Kulkarni recently raised his price target to $365 from $310. He maintained a Buy rating.

Kulkarni pointed to TPU chip partnerships and new Waymo city launches as catalysts. He also expects major sporting events and midterm elections to boost ad spending later in 2026.

Speaking of Waymo, the self-driving unit just raised $16 billion. That funding round valued Waymo at $126 billion.

Waymo operates the only paid robotaxi service in the U.S. without safety drivers. The fleet includes more than 2,500 vehicles.

Options traders expect a 5.83% stock move in either direction after the earnings announcement. Wall Street maintains a Strong Buy rating on Alphabet stock based on 22 Buy ratings and six Hold ratings.

The average price target of $355.76 suggests 4.72% upside from current levels. Alphabet spent about $90 billion on capital expenditures in 2025, with analysts expecting around $116 billion for 2026 as the company expands AI data center capacity.

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