Earnings Report Preview | "Resisting Economic Uncertainty" Strong Contender! Major Banks Are Bullish on Alphabet Ahead of Q1 Earnings

According to Zhitong Finance APP, Google's parent company Alphabet (GOOGL.US) is scheduled to announce its first-quarter financial report after the market closes on Thursday, Eastern Time. Currently, analysts are generally optimistic about the tech giant's ability to withstand economic uncertainties. The market expects Alphabet's first-quarter revenue to reach $89.22 billion, a year-on-year increase of 11%; net profit is projected to be $24.71 billion, with earnings per share of $2.01, higher than last year's $23.66 billion and $1.89 per share.

Among the 19 analysts covering Alphabet tracked by VisibleAlpha, 14 have given the stock a "buy" or equivalent rating, while the remaining analysts have issued "hold" ratings. The consensus target price among analysts is close to $195, indicating about a 29% upside potential compared to Thursday's closing price of around $151.

Citigroup analysts recently stated that they expect Google Search "to be one of the last platforms affected by macroeconomic factors and one of the first to recover." Citigroup also emphasized that with the application of AI tools such as Google's search AI model and the launch of the company's latest Gemini large language model, Google has strong growth potential.

Morgan Stanley also pointed out that "AI-driven innovations" on the Search and YouTube platforms are reasons for their "confidence in Google's long-term growth sustainability." Citigroup and Morgan Stanley have set target prices of $195 and $185 for Alphabet, respectively.

However, Alphabet also faces numerous external challenges and opportunities. U.S. District Judge Leonie Brinkema ruled on April 17, Eastern Time, that Google's digital advertising market violated antitrust laws. Within less than a year, two federal judges have ruled that Alphabet illegally monopolized the fields of online advertising technology and online search services. This may lead to potential business restructuring for Alphabet in the future, and the competitive landscape in its advertising technology sector may undergo changes.

During the earnings call, analysts may ask Alphabet about the aforementioned rulings and future directions. Citigroup analysts stated that considering the outcome of this ruling, "if Google ultimately divests its advertising network, we would not be surprised," although Google's core business may not be significantly affected.

As of Thursday's close, Alphabet's stock price has fallen by one-fifth since the beginning of 2025. The U.S. stock market will be closed on Friday due to Good Friday.

Looking back at previous financial data, Alphabet achieved revenue of $96.469 billion in Q4, a year-on-year increase of 12%, but slightly below analysts' expectations of $96.62 billion; net profit was $26.536 billion, a year-on-year increase of 28%; earnings per share were $2.15, exceeding the same period last year’s $1.64, but falling short of market expectations of $2.13.

In that quarter, Google Search ads slightly exceeded analysts' expectations, generating $54 billion in sales; however, its overall advertising business performance seemed to lag behind Meta Platforms (META.US). Meanwhile, Google's cloud business performance was disappointing, with a slowdown in growth compared to the third quarter Despite this, Google still announced that it will continue to increase its investment in artificial intelligence infrastructure in 2025, with capital expenditures expected to reach an "astonishing" $75 billion this year. Chief Financial Officer Arnaud Ashkenazy stated that investments in the first quarter are expected to reach $16 billion to $18 billion, helping the company meet the growing computing demands of its customers