TLDR
- Alphabet reports third-quarter earnings after the close Wednesday, and options pricing points to a move of up to 6% by week’s end.
- That range puts GOOGL between about $303 and $338, based on Friday’s close.
- Analysts expect revenue of $127.86 billion, up about 25%, with EPS of $2.96.
- Google Cloud revenue is forecast to nearly double to $29.15 billion.
- Alphabet is up just 2% this year, and 12 of 13 tracked analysts rate it a buy with an average target of $433.
Alphabet (GOOGL) is set to report third-quarter results after the closing bell on Wednesday. Options traders are pricing in a move of up to about 6% in either direction by the end of the week.
Measured from Friday’s close, that could lift the stock as high as $338 or drag it below $303. The stock is up just 2% for the year so far. It has pulled back from its May record high.
Many AI-related stocks have taken a hit lately on worries about industry spending. Alphabet has kept posting solid growth through that stretch. Earnings from Alphabet, Microsoft and Amazon this week could show whether tech’s AI spending is paying off.
What Wall Street expects
Analysts surveyed by Visible Alpha expect third-quarter revenue of $127.86 billion. That would be growth of about 25% from a year ago. Earnings are seen at $2.96 per share, up 9 cents.
Google Cloud is the number to watch. Analysts see its revenue nearly doubling to $29.15 billion. Strong Cloud demand is the main driver behind the growth forecasts.
Sentiment on Wall Street is largely positive. Of the 13 analysts tracked by Visible Alpha, 12 rate the stock a buy and one is neutral. Their average price target of $433 implies about 35% upside from Friday’s close.
Bank of America analysts said they will watch for updates on Google search growth. They pointed to possible pressure from new AI agents, along with Google’s own AI agent plans. They added that search revenue could be volatile.
The same analysts said Google has executed well in moving users to AI Mode and Gemini. They believe the company is well placed to lead in the AI era. They cited its own models, custom chips and broad product reach.
Why Alphabet may avoid a Meta-style reaction
Investors come into this report with a few things in their favor. Meta surprised the market last week with several negative developments. Those included its first negative free cash flow since 2012.
D.A. Davidson analyst Gil Luria said Alphabet may have already faced its reckoning. He noted the company did some fundraising and flagged a big increase in capex next year when it reported the second quarter.
Luria also pointed out that Sergey Brin and Larry Page moved out of California before the January 1, 2026 cutoff. They may avoid having to sell shares to cover a proposed California billionaire tax. That would keep the focus on Anthropic-driven growth in Google Cloud.
Meta, meanwhile, is creating a new class of nonvoting Class C stock to fund its AI spending. Existing holders will get one new Class C share for each Class A or Class B share. Trading is slated to begin in January 2027.
Meta stock fell about 2% on Monday. Alphabet’s Class C stock (GOOG) slipped about 1% the same day.
Alphabet is due to report after the close on Wednesday. Analysts are looking for $127.86 billion in revenue and $2.96 per share.
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