:max_bytes(150000):strip_icc()/GettyImages-2180164343-859ba6a99b6c4a98a5f8ad705c1b6f98.jpg "What You Need To Know Ahead of Google Parent Alphabet’s Earnings")
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UPDATE—Oct. 28, 2024: This article has been updated to reflect more recent analyst estimates and share price information.
Key Takeaways
- Google parent Alphabet will report third-quarter earnings after the market closes Tuesday.
- The tech titan is expected to post revenue and income growth, driven in part by its Google Cloud division.
- Investors will likely be watching for commentary from new CFO Anat Ashkenazi, who took over the role in July.
Google parent Alphabet (GOOGL) will report earnings after the market closes Tuesday, with analysts expecting the tech giant to post revenue and earnings growth.
Alphabet is projected to report third-quarter revenue jumped more than 12% year-over-year to $86.41 billion. Earnings are expected to climb to $23.05 billion or $1.85 per share, up from $19.69 billion or $1.55 per share a year earlier.
| Analysts’ Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
| Revenue | $86.41 billion | $84.74 billion | $76.69 billion |
| Earnings Per Share | $1.85 | $1.89 | $1.55 |
| Net Income | $23.05 billion | $23.62 billion | $19.69 billion |
Key Metrics: Cloud Revenue and AI Spending
In the second quarter, Alphabet’s results topped estimates as revenue from Google Cloud surged 28% year-over-year to $10.35 billion. However, the company’s stock took a hit the day after the report amid concerns about the tech giant’s higher spending on artificial intelligence (AI).
CEO Sundar Pichai told investors in the company’s earnings call in July that when it comes to spending on AI, “the risk of underinvesting is dramatically greater than the risk of overinvesting for us here.”
Jefferies analysts called AI an “emerging contributor” for Google Cloud, and said that while they expect continued growth in the third quarter, the benefits from AI could become more pronounced in 2025 and 2026. The Visible Alpha analyst consensus for Google Cloud revenue in the third quarter is $10.87 billion, which would represent 29% growth.
Business Spotlight: New CFO Commentary
Anat Ashkenazi took over as Alphabet’s chief financial officer on July 31, which could open the door for new disclosures after the former Eli Lilly (LLY) executive’s first quarter on the job, Bank of America analysts said.
Some potential third-quarter positives the new CFO could address include Google Search strength suggesting that AI is driving higher monetization, YouTube benefit from political spending, and new advertising opportunities, the analysts said.
Shares of Alphabet have gained over 19% since the start of the year, at $166.72 as of Monday’s close.