Alphabet to Report Q2 Earnings: What's in Store for the Stock?

Alphabet’s GOOGL second-quarter 2025 results, scheduled to be released on July 23, are expected to benefit from solid momentum in Search, Cloud, and advertising businesses. 

In first-quarter 2025, Google advertising revenues rose 8.5% year over year to $66.885 billion and accounted for 74.1% of total revenues. Search and other (75.8% of advertising revenues) revenues grew 9.8% year over year to $50.702 billion. YouTube’s advertising revenues improved 10.3% year over year to $8.972 billion. Google Cloud revenues increased 28.1% year over year to $12.26 billion. 

The top-line momentum is expected to have continued in the to-be-reported quarter. The Zacks Consensus Estimate for advertising revenues is currently pegged at $69.023 billion, suggesting 6.8% growth over the figure reported in the year-ago quarter.

Alphabet has an impressive earnings surprise history. GOOGL’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 14.64%. 
 

Alphabet Inc. Revenue (TTM)

Alphabet Inc. revenue-ttm | Alphabet Inc. Quote

Click here to know how Alphabet’s overall second-quarter 2025 results are likely to be.

GOOGL’s AI Push to Boost Search Business

Alphabet’s initiatives to deploy artificial intelligence (AI) in search are noteworthy. The integration of Generative AI (Gen AI) technology into the search engine has been benefiting Google Search. AI-powered Circle to Search is now available on more than 300 million Android devices, with people using it to shop, translate text, and learn more about the world around them. AI Mode in Search is now available in the United States.

AI Overviews is driving a more than 10% increase in usage of Google for queries that support AI Overviews in Google’s biggest markets, like India and the United States. The addition of AI mode expands AI Overview’s advanced reasoning, thinking and multimodal capabilities. Alphabet expanded AI Overviews in Google Search to new countries during the to-be-reported quarter, which is now available in more than 200 countries and territories and in more than 40 languages. AI Overviews now support Arabic, Chinese, Malay, Urdu and more. 

The AI infusion bodes well for Alphabet’s Search business which is facing stiff competition from Microsoft MSFT Bing, YANDEX, Yahoo!, DuckDuckGo and Baidu BIDU apart from OpenAI’s ChatGPT. According to statcounter.com, Google had market share of 89.54% for the June 2024-June 2025 timeframe, trailed by Microsoft Bing’s 3.95%, YANDEX’s 2.45%, Yahoo!’s 1.37%, DuckDuckGo’s 0.86% and Baidu’s 0.73%.

The Zacks Consensus Estimate for Search and other revenues is currently pegged at $52.4 billion, suggesting 8% growth over the figure reported in the year-ago quarter.

Google Cloud Revenues to Grow Y/Y

Alphabet has been growing rapidly in the booming cloud-computing market. Google Cloud has solidified its position as the third-largest provider in the highly competitive cloud infrastructure market against the likes of Microsoft Azure and Amazon Web Services.

In Cloud, Alphabet is benefiting from its partnership with NVIDIA NVDA. Google Cloud was the first cloud provider to offer NVIDIA’s B200 and GB200 Blackwell GPUs and will be offering its next-generation Vera Rubin GPUs. The introduction of 2.5 flash, Imagen 3 and Veo 2 are noteworthy developments. 

Google Cloud is becoming a preferred choice for enterprises planning to deploy AI agents thanks to the Agent Development Kit and a low-code tool offering Agent Designer. The addition of Wiz to Google Cloud will boost competitive prowess against the likes of Amazon and Microsoft in the cloud computing space.

The Zacks Consensus Estimate for Cloud revenues is currently pegged at $13.04 billion, suggesting 26% growth over the figure reported in the year-ago quarter. 

Alphabet currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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