Alphabet to Report Q1 Earnings: What's in Store for the Stock?

Alphabet’s GOOGL first-quarter 2025 results, scheduled to be released on April 24, are expected to benefit from solid momentum in search and cloud businesses. 

Alphabet’s initiatives to deploy artificial intelligence (AI) and infuse AI in search are noteworthy. Circle to Search is driving additional search and is gaining popularity among young users. This is expected to have driven advertising growth in the to-be-reported quarter.

The Zacks Consensus Estimate for advertising revenues is currently pegged at $66.29 billion, suggesting 7.5% growth over the figure reported in the year-ago quarter.

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.

Alphabet Inc. Price and Consensus

Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote

In the fourth quarter of 2024, Google Cloud revenues soared 30.1% year over year to $11.96 billion, and accounted for 12.4% of the quarter’s total revenues. For the first quarter of 2025, the Zacks Consensus Estimate for Google Cloud revenues is pegged at $12.16 billion, suggesting growth of 32.3% from the year-ago quarter’s reported figure.

Alphabet has an impressive earnings surprise history. GOOGL’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 11.57%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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

GOOGL’s Q1 Earnings to Reflect AI Push

Alphabet’s expanding Generative AI (Gen AI) capabilities are noteworthy. 
The search giant has been cashing in on the increasing demand for Large Language Models (LLMs) with Gemini. 

Vertex usage increased 20 times in 2024, with strong developer adoption of Gemini Flash, Gemini 2.0, Imagen 3 and Veo. This trend is expected to have continued in the to-be-reported quarter.

The integration of Gen AI technology into the search engine has been benefiting Google Search. LLMs, coupled with multi-search and visual exploration features, are continuously improving the search results.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.

Alphabet currently has an Earnings ESP of +0.51% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:

StoneCo STNE has an Earnings ESP of +13.79% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

StoneCo shares have appreciated 64.6% year to date. STNE is set to report its first-quarter 2025 results on May 8.

Baidu BIDU currently has an Earnings ESP of +8.67% and a Zacks Rank #2.

Baidu shares are up 0.9% year to date. BIDU is slated to report its first-quarter 2025 results on May 21.

Qorvo QRVO presently has an Earnings ESP of +3.42% and a Zacks Rank #2. 

Qorvo shares have plunged 15.4% year to date. QRVO is scheduled to report its fourth-quarter fiscal 2025 results on April 29.

 

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

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