Alphabet Q1 Earnings Preview: Google Parent Stock At 'Fork In The Road,' While Antitrust Concerns Remain

Tech giant Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) is set to report quarterly financial results Thursday after market close as the company faces a key antitrust case that could change the structure of the company's business segments moving forward.

Here are the analyst estimates for the first quarter, what analysts are saying and key items to watch.

Earnings Estimates: Analysts expect Alphabet to report first-quarter revenue of $88.87 billion, up from $80.54 billion in last year's first quarter, according to data from Benzinga Pro.

The company has beaten analyst estimates for revenue in eight straight quarters.

Analysts expect Alphabet to report first-quarter earnings per share of $2.02, up from $1.89 in last year's first quarter. The company has beaten analyst estimates for earnings per share in eight straight quarters.

Read Also: Alphabet CEO Pichai Warns Employees Of High Stakes 2025: ‘We Are Facing Scrutiny Across The World’

What Experts Are Saying: Alphabet's advertising revenue could provide an earnings surprise, Navellier & Associates chairman Louis Navellier said in a recent podcast.

"Well, their sales are forecasted to go up 10.7%, and earnings are forecast to grow 7%. Google does not provide any guidance whatsoever, but it has a very good earnings surprise history. I think what everybody's going to be looking at is their advertising revenue very carefully,” Navellier said.

Bank of America analyst Justin Post recently maintained a Buy rating on Alphabet with a price target of $185.

The analyst said that the Street has been lowering expectations for Alphabet, which could mean an in-line quarter or beat comes across as a positive.

Needham analyst Laura Martin highlighted Alphabet's large language models as a key upside valuation driver ahead of earnings.

The analyst recently reiterated a Buy rating with a $178 price target.

Martin said generative AI will help increase Alphabet's revenue growth. The company's segments, like Google's search engine and YouTube, give Alphabet's large language models a competitive advantage, Martin said.

Freedom Capital Markets chief global strategist Jay Woods said Alphabet is making headlines due to ongoing antitrust litigation and competition in search from the likes of ChatGPT.

"Shares have been under pressure all year and find themselves at a fork-in-the-road coming into their Thursday number," Woods said in a weekly newsletter.

Woods said Alphabet stock rallied and paused at the end of 2024.

"That level of prior resistance now became support in textbook fashion. Shares rallied from there to make new all-time highs. Then, they failed again."

Woods said Alphabet stock shows a favorable risk/reward scenario with the potential to break down to the $140.50 and $136 levels, while the upside shows "smooth sailing" to the 50-week moving average above $172.

"It may take a strong beat and guide in this macro environment to push much higher, but the lines are set as we head into this busy week of earnings."

Key Items to Watch: One of the biggest items to watch with Alphabet stock remains the ongoing antitrust case with the Department of Justice.

Alphabet will likely be forced to sell or spin off its Chrome segment, with the DOJ finding Alphabet in violation of antitrust laws. The company could be forced to end its search deals with smartphone companies like Apple as well.

While Alphabet is unlikely to comment on the pending case, any commentary on what comes next or if the company discusses businesses in more separate lines than usual could signal future plans.

Google Search and YouTube were bright spots in the fourth-quarter results. Investors and analysts will look for these key indicators to show strength in the Q1 results and in future guidance. Google Cloud also posted strong growth in the fourth quarter.

"Together, Cloud and YouTube exited 2024 at an annual run rate of $110 billion. Our results show the power of our differentiated full-stack approach to AI innovation and the continued strength of our core business," Alphabet CEO Sundar Pichai said after fourth-quarter results.

Alphabet’s results could put pressure on several top ETFs, as the stock is a member of the Magnificent Seven and one of the largest companies in the world.

Alphabet is the third-largest holding in the Roundhill Magnificent Seven ETF (BATS: MAGS) at 14.9%. The company is also one of the largest holdings in the Invesco QQQ Trust (NASDAQ:QQQ), with Class A shares being the ninth-largest holding at 2.6% and Class C shares being the 11th-largest holding at 2.5%.

GOOGL Price Action: Alphabet stock was up 2.6% to $155.35 on Wednesday versus a 52-week trading range of $140.53 to $207.05. Alphabet stock is down 18% year-to-date in 2025.

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