Alphabet Earnings Preview: Investors Eye Record Revenue Amid AI Spending Scrutiny

Alphabet (NASDAQ:GOOGL) will release fourth-quarter earnings on Wednesday afternoon. Traders expect the company could hit a new stock high after the report, and analysts forecast record revenue as questions persist about tech giants’ AI spending and when those investments will produce measurable returns.

Alphabet’s shares have risen roughly 70% over the past year, far outpacing the S&P 500. Although generative AI names like NVIDIA (NASDAQ:NVDA) and OpenAI have dominated headlines, Alphabet’s case is strengthened by robust cloud growth, increasing adoption of its Gemini platform, and a stabilizing advertising business.

Key Highlights:

• Google Cloud is gaining momentum, Gemini adoption is rising, and ad revenues stay healthy, but lofty expectations leave little room for error.
• The stock has climbed about 25% since the last earnings report after Alphabet began benefiting from multiple AI-related cloud deals with Meta, Anthropic, and OpenAI. The launch of Gemini 3, which outperformed rivals on benchmarks and prompted OpenAI to declare a "code red" plus a landmark deal with Apple (NASDAQ:AAPL), have reinforced Alphabet’s standing as an AI frontrunner and helped drive the shares higher.
• Raymond James analyst Josh Beck wrote in a late-January client note that Alphabet may now offer "the highest-quality top-line AI acceleration stories in the public universe," and upgraded the stock from Outperform to Strong Buy. He highlighted Google’s edge as a full‑stack AI provider, noting the company has started selling its AI chips (TPUs) to outside customers instead of keeping them exclusively for internal use.
• The biggest near-term risk to Alphabet’s ad business is a potential structural shake-up after Judge Leonie Brinkema found Google unlawfully monopolized ad tech, a remedies decision is expected in early 2026. The DOJ seeks full divestiture of the Google Ad Manager suite which is about 12% of revenue and losing that tightly integrated “ad stack” would break buyer-seller synergies, likely compressing GOOGL’s valuation and leaving investors with a more fragmented, less profitable company.
• Alphabet’s search dominance faces an unprecedented assault in 2026; recent rulings ended exclusive distribution deals on Chrome, Android and Apple devices and will force Google to share proprietary search data with rivals. That regulatory “data tax” levels the field for agile competitors like OpenAI and Perplexity, which are already gaining share. As user-acquisition costs rise and Google’s algorithmic edge erodes, the company’s core search revenue, and thus its stock momentum is at risk.
• YouTube remains a cultural giant but its hold on attention is weakening as TikTok’s short-form stickiness with engagement roughly five times higher than traditional platforms draws younger users away leaving YouTube’s long-form content less compelling. 

Analysts Expectation:

• Bernstein SocGen Group raised its price target for Alphabet (GOOGL) to $335 from $305 while keeping a Market Perform rating.
• A Mizuho analyst kept Alphabet at Outperform and raised the price target to $400 from $365.
• Roth/MKM raised their price target for Alphabet (GOOGL) to $365 from $310 and kept a Buy rating.

GOOG Q4 2025 earnings after-market (4:03 pm ET) Wednesday February 03, 2026

Expected Move by Option Expiration:

Options flow shows a large net positive gamma at the 350 strike (+$41,892.356) and a net negative gamma at the 330 strike (-$24,851.183) across expiries from Feb 2026 to Dec 2028. The put/call ratio indicates a mixed bias for the next three weeks’ expiry and a bearish bias for the February 27 expiry.

Technical Analysis Perspective:

• Google has tended to form a rising wedge pattern, which is bearish once the lower rising trendline is broken.
• The stock began breaking down after earnings in June 2024.
• Prices have been testing the wedge’s upper boundary since yesterday; currently at 350.50 and increasing by about $1 per day.
• The wedge’s lower boundary is around 330–328.
• If the stock follows the historical pattern, it should fail to clear 350.50 before and after earnings.
• The stock is then expected to slide toward 330–328 and break lower with strong selling momentum.
• For now, I will watch the 350.50–328 range until it is decisively broken.
• A strong, sustained break above 350.50 would invalidate the wedge.

Weekly Candlestick Chart

GOOG Seasonality Chart:

Since 2014, GOOG has seen February close with 2.2% down in 42% of years and March with a 0.9% gain in 58% of years.

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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners, and Bridge Information Systems.

He is the founder of TwT Learnings, provides financial market training.

Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.