3 Reasons to Buy Alphabet Stock Before Feb. 4

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) was one of the best-performing 2025 stocks. It rose 65% in 2025 and is off to a hot start in 2026. It's up 5% already for the year, although it could be heading higher after Feb. 4.

That's when Alphabet reports fourth-quarter results, and I think they could be quite impressive. Here are three reasons why Alphabet's stock is a great buy before then, as it may jump higher following its earnings announcement.

Image source: Getty Images.

1. Gemini is becoming a top generative AI model

At the start of 2025, many investors wouldn't have believed you if you'd told them that Gemini was among the best generative AI options, but that's where we're at now. Alphabet has clawed its way back from last place to being a frontrunner, and its unmatched resources in this field make it an easy company to bet on.

Gemini is also the most used generative AI model, but not in the way you might think. I'm not talking about going directly to the Gemini website or app; I'm talking about its integration with Google Search. Google Search is how the majority of the internet is still navigated, and with a Gemini-powered AI search overview at the top of each result, it's being used millions of times daily. This also allows Gemini to gather information about its performance, which is key to developing a successful AI model.

Another area where Gemini has unmatched data is its recent announcement that it can integrate with Google's app family to deliver a tailored generative AI experience. With permission, Gemini can utilize information from your email, photos, YouTube search history, and other information connected to your Google account to deliver an unmatched AI experience. That's something that no upstart can replicate, and it gives Gemini an edge over all other models.

2. Google Cloud is starting to deliver strong profitability

While Gemini is emerging as a leader in its space, it isn't generating a ton of revenue. However, Google Cloud is. Google Cloud is Alphabet's cloud computing division, and it's actually capitalizing on artificial intelligence spending. By renting out some of its computing capabilities, Alphabet can profit from the many companies looking to develop AI tools. While Alphabet is spending a ton of money putting up data centers to meet this demand, renting is a way for Alphabet to profit right now from the massive amount of AI interest.

In the third quarter, Google Cloud's revenue rose an impressive 34% year over year. Additionally, its operating margin increased from 17% to 24% -- a massive jump. If Google Cloud can maintain its impressive growth rate and continue improving its margins, it will start to become a magnificent part of Alphabet's business. This is a far steadier business than its primary one, and is an excellent reason to own the stock.

3. Its legacy ad business is still excelling

Despite all the talk about AI and cloud computing, Alphabet is still an advertising business at its core. The ad market has been strong lately, which has allowed Alphabet to excel. I don't see that changing anytime soon, as there hasn't been much shift in consumer habits between Q3 and Q4. This should allow the bulk of Alphabet's businesses to grow at an impressive rate and lead to strong Q4 results.

Wall Street analysts expect Alphabet to announce 15% revenue growth in Q4. However, its earnings per share are expected to rise from $2.15 last year to $2.66 this year -- a 24% gain. If Alphabet beats expectations, don't be surprised to see the stock pop 5% or so higher. I think Alphabet will also give a rosy outlook for 2026, which makes the stock a smart buy before it announces earnings in a few weeks.

Keithen Drury has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.