Alphabet's Q4 Earnings Report: A Test of Stock Rally Amid AI Advancements

Feb 4, 2026, 2:23 AM

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Alphabet Inc, the parent company of Google, is scheduled to report its fourth-quarter earnings after the market closes today. Investors anticipate a positive outlook, expecting rising revenue and profits driven by robust growth in the cloud and advertising sectors, which are particularly relevant in the current AI boom.

Analysts from Jefferies have projected that Alphabet's cloud business will benefit significantly from strong enterprise demand and the momentum generated by artificial intelligence advancements. Specifically, Wall Street expects Google Cloud revenue to increase by 26% year-over-year, reaching approximately $13.14 billion. Additionally, revenue from Google's Search and Other division is anticipated to rise by about 9%, totaling around $52.93 billion. Overall, total revenue is expected to climb by 11%, amounting to $94.01 billion.

Despite these positive forecasts, some analysts, including those at Wedbush, caution that Google's advertising revenue may face challenges due to the shifting landscape towards generative AI search capabilities. This shift could potentially impact the company's dominance in the digital advertising space, which has been a significant revenue driver historically.

The broader market context surrounding Alphabet's earnings release is also noteworthy. The tech-heavy Nasdaq Composite recently rose by over 1%, buoyed by optimistic sentiments following a federal court ruling that allowed Google to maintain its Chrome browser while imposing certain limitations on its search agreements. The ruling is seen as a positive development that alleviates some regulatory pressures on Alphabet, allowing investors to refocus on the company's fundamentals.

Mark Mahaney, head of internet research at Evercore ISI, expressed confidence in Alphabet's stock, stating that the recent legal developments have cleared distractions and that the fundamentals remain attractive for long-term investors. However, concerns about the overall economic landscape persist, especially as recent job openings data showed a decline to levels not seen since the pandemic, heightening caution among investors.

As Alphabet prepares to unveil its earnings, it is not alone in this reporting season. Fellow members of the "Magnificent Seven," including Tesla, Microsoft, and Meta, are also set to announce their quarterly results soon, creating a competitive environment in the tech sector. Traders are closely watching options pricing data, which suggests a potential significant movement in Alphabet's stock price by the end of the week following the earnings report.

In summary, Alphabet's upcoming earnings report serves as a crucial test of its stock rally amidst ongoing advancements in artificial intelligence and a complex regulatory environment. Investors will be keen to see how the company navigates these challenges and capitalizes on its strengths in cloud computing and advertising, which could significantly impact its stock performance in the near term.

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