Alphabet to report Q4 earnings as investors look to cloud growth, AI spending

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Alphabet to report Q4 earnings as investors look to cloud growth, AI spending

Alphabet (GOOG, GOOGL) is set to release its results for the fourth quarter after the bell on Tuesday, kicking off a second week of earnings for US tech giants as Wall Street looks to see how the search behemoth will respond to the threat of ******** startup DeepSeek’s AI models.

The

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parent is also expected to offer updates on its efforts to turn massive AI investments into new revenue streams and the broader performance of the massive digital ad market.

Advertising rival Meta (META) reported earnings last week, easily beating Wall Street’s expectations on the top and bottom lines, but declined to provide full-year guidance. Meta, like Alphabet, is investing heavily in its AI efforts as it seeks to use the technology to improve ad sales and user engagement.

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, and US tech companies more generally, are still reeling from the breakout success of DeepSeek’s V3 and R1 models. Purportedly developed for a fraction of the cost of

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’s Gemini and OpenAI’s ChatGPT, DeepSeek’s efficiency raises questions about whether Silicon Valley is overinvesting in AI hardware.

Alphabet is expected to report earnings per share of $2.13 on revenue of $96.6 billion for the quarter, up from $1.64 per share and $86.3 billion for the same ******* last year.

Advertising revenue is expected to top out at $71.7 billion, up from $65.5 billion a year ago, while

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Cloud revenue is set to hit $12.1 billion compared to the 9.1 billion the company saw last year.

Cloud growth is an important metric for Alphabet as it seeks to gain market share from rivals

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(AMZN) and

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(MSFT).

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’s cloud revenue jumped 21% year over year during its most recent quarter, climbing to $40 billion. Still, that was shy of Wall Street’s expectations of $41.1 billion, sending shares of the Windows maker lower.

Gemini website is screened on a mobile phone for illustration photo in Krakow, Poland on Feb. 1, 2025. (Photo by Beata Zawrzel/NurPhoto via Getty Images) · NurPhoto via Getty Images

“We believe that cloud growth should keep a high-20s to low-30s percentage growth pace through 2026, driven by greater contribution from artificial intelligence workloads as capacity expands, as well as the December launch of Gemini 2.0,” said Angelo Zino, equity analyst at CFRA Research, in a note.

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, like Meta, is awaiting the outcome of Trump’s advocacy for TikTok, the short-form video app that was supposed to shut down its US operations last month but has continued to run as the president seeks a workaround to avoid an outright ban.

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also continues to face regulatory risks. Late last year,

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appealed a ruling after the courts found that the company abused its monopoly power over the search business. One potential remedy, suggested by government lawyers, is a breakup of the company. The market has largely shrugged off immediate concerns of a drastic shake-up, however.

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CEO Sundar Pichai was among the tech elite who attended Trump’s inauguration, in what many political and market observers see as an industrywide reset toward a more accommodating relationship with the president. What impact Trump’s policies will have on Silicon Valley and what his more business-friendly administration will mean for

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’s court troubles will also be on investors’ minds heading into earnings.

Alphabet shares are up 41% over the past 12 months, outpacing

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shares, which rose 39%, and easily beating

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shares, which are up just 2% during the same time *******.

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Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X

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is a tech editor at Yahoo Finance. Follow him

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#Alphabet #report #earnings #investors #cloud #growth #spending

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