TLDR
- Alphabet reports Q3 earnings after the close Wednesday, with analysts expecting EPS of about $3.01 and revenue near $128 billion.
- GOOGL closed at $316.83 on Tuesday and was up about 1% in premarket trading.
- Cloud revenue is forecast to jump 91% to $28.9 billion, while ads are projected at $83.5 billion.
- Oracle will be the first buyer of Google’s TPU chips, and TD Cowen sees $9.4 billion in TPU sales in the second half of 2026.
- Meta’s Muse AI agent, now set up by 10 million people, is a growing competitor to Google Search.
Alphabet (GOOGL) closed at $316.83 on Tuesday, up 0.84%. The stock rose about 1% in premarket trading Wednesday, ahead of its third-quarter report due after the bell.
Analysts expect earnings per share between $2.96 and $3.02, depending on the source. Revenue estimates sit between $127.8 billion and $128.2 billion, up from $102.35 billion a year ago.
Alphabet has topped both revenue and EPS estimates for 14 straight quarters. The streak is one of the things traders will be watching.
The stock is still well off its May record of $408.61. It sits about 21.6% below that level and is up just 1.6% so far in 2026.
What Analysts Want to See
Google Cloud is the main focus. Revenue is forecast to jump 91% to roughly $28.9 billion, with operating margins near 35%.
Advertising is projected at $83.5 billion. Revenue excluding traffic acquisition costs is expected at $111.2 billion.
Spending is the other side of the story. AI infrastructure outlays of $195 billion to $205 billion this year pushed free cash flow negative in Q2, the first time since Alphabet went public.
Chips could add a new revenue line. Oracle said Tuesday it will be the first company to buy Google’s TPUs for its own data centers. A source also said OpenAI plans to use Google’s AI chips.
TD Cowen’s John Blackledge expects $9.4 billion in TPU sales in the second half of 2026. He sees that rising to $62.5 billion in 2027 and $138 billion in 2028.
BofA analyst Justin Post named TPU sales, a competitive agentic offering and the Gemini 4 launch as possible catalysts. He also flagged search growth as a focus, given the Muse launch.
Competition and Analyst Views
Meta CEO Mark Zuckerberg said 10 million people have set up Muse, mostly for shopping. If it keeps growing, it could challenge Google in online sales.
Search itself looks solid for now. StatCounter data shows Google holding 89.94% of the search market, and AI Mode passed 1 billion monthly users in Q2.
Wall Street’s average 12-month price target is $427.25. Needham reiterated Buy with a $450 target, and Truist reiterated Buy at $420.
Citizens cut its target to $450 from $515 but kept a Market Outperform rating. LSEG data shows 54 Buy ratings, 5 Holds and no Sells.
Options markets imply a move of roughly 6% either way by the end of the week. That puts the range at about $303 to $338.
Last week, traders sold off CoreWeave over its debt load, which dragged large parts of the market lower. That put AI spending concerns front and center heading into this report.
Alphabet reports after the close at about 4:03 pm ET Wednesday.
Chart Analysis
GOOGL appears to be trading inside a triangle-like pattern, which points to consolidation rather than a clear trend. Support sits near $315 to $316, with resistance around $352 to $357. The stock remains well below its May peak.
The source material did not include RSI or MACD readings, so I can’t say what those indicators suggest.
What to watch: Holding above $315 after earnings keeps the path open toward $352 to $357. A sustained break below $315 could put the $300 to $294 zone in play.
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