Google parent Alphabet Inc. (NASDAQ:GOOGL) heads into its fourth-quarter earnings with momentum building across Search and Cloud, as a surge in AI-driven usage and advertising demand sets the stage for a potential revenue and profit beat that could reshape expectations for its growth trajectory in 2026.
Bank of America Securities analyst Justin Post expects Alphabet to deliver a fourth-quarter revenue and EPS beat, and he slightly raised his forecasts ahead of the Feb. 4 report, citing signs of a steady ad market and potential acceleration in Gemini-related usage.
The analyst maintained a Buy rating on Alphabet with a price forecast of $370.
He said strong Meta Platforms Inc. (NASDAQ:META) results point to healthy holiday ad spending, and he increased his Search growth assumption to about 15% from 14%.
Post also said Search growth could land around 15%–16% versus the Street near 13%, while YouTube growth could run about 14%–15% versus roughly 13% expected.
Fourth-Quarter Revenue, EPS, And Margin Outlook
For the fourth quarter, the analyst expects a revenue of $95.9 billion and EPS of $2.65, above the Street estimates $95.2 billion and $2.64.
He expects operating expenses of $28.0 billion, up 13% year-over-year, and operating margin expansion of 119 basis points.
Post also pointed to job data showing openings down about 7% quarter over quarter, which he views as evidence of disciplined hiring.
The analyst said Alphabet’s first-quarter commentary will likely matter most for the stock.
He lifted his first-quarter view to roughly $90.1 billion in revenue and $2.56 in EPS, versus Street expectations near $88.8 billion and $2.54.
Post also raised his 2026 capex estimate by 14% to about $139 billion versus Street levels closer to $119 billion, reflecting infrastructure investment across the sector.
Ad Checks And Other Income Revisions
In Post’s estimate revisions, he said he raised ad revenue assumptions on healthier holiday ad checks and favorable FX.
The analyst also lifted “Other Income” to reflect a possible mark-to-market gain from Alphabet’s stakes in companies such as SpaceX and Anthropic, taking that line to about $1.3 billion from $0.8 billion.
For the fourth quarter of 2025, he raised Search revenue to about $61.9 billion (+15% Y/Y) and YouTube to about $12.0 billion (+15% Y/Y), while leaving Cloud unchanged.
For 2026, Post lifted net revenue about 1% to roughly $400 billion, increased opex about 0.4% to about $117 billion, and raised GAAP EPS about 1% to $11.22.
At the same time, the analyst cut his 2026 free cash flow estimate to about $53 billion as he increased his 2026 capex forecast to $139 billion (about +50% Y/Y).
GOOGL Price Action: Alphabet shares were down 0.17% at $337.67 at the time of publication on Friday. The stock is trading near its 52-week high of $342.29, according to Benzinga Pro data.
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