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What You Need to Know Ahead of Google Parent Alphabet’s Earnings Report

Posted on by darion

Key conclusions

  • Alphabet, the company that owns Google, will release its second-quarter financial results after the close of trading on Tuesday.
  • Analysts expect revenues and profits to increase compared to the same period last year.
  • The company will report revenue from Google Cloud, and investors will likely expect stable growth.
  • Alphabet may also share updates on its AI initiatives.

Google parent Alphabet ( GOOGL ) is set to report its second-quarter earnings after the close of trading on Tuesday, with investors likely to be looking for continued growth in the cloud and updates on artificial intelligence (AI) initiatives.

The tech giant is expected to post revenue of $84.3 billion, up 13% from the same period last year, according to estimates from Visible Alpha. Net income is expected to come in at $23 billion, or $1.85 per share, up from the second quarter of 2023.

Analysts’ estimates for Q2 2024 Q1 2024 Q2 2023
Income $84.3 billion $80.54 billion $74.6 billion
Diluted earnings per share $1.85 $1.89 1.44 dollars
Net income $23 billion $23.66 billion $18.37 billion

Key Metric: Cloud Growth

Investors will likely see continued growth in the Google Cloud market as revenue from this segment could ease investor concerns about increased spending by big tech companies on AI investments.

Analysts expect cloud services revenue to hit $10.22 billion, according to Visible Alpha consensus estimates, up from the prior quarter and the same period a year earlier.

Business in Focus: The Impact of AI

The company could provide investors with updates on projects like its AI assistants, Gemini Live and Project Astra, which could help Alphabet compete with Microsoft (MSFT)-backed OpenAI. Alphabet could provide insight into how AI Overview is affecting Google Search.

It could also provide some context about the deal’s interest. The company is reportedly in talks with cybersecurity startup Wiz to acquire it in a deal valued at about $23 billion. If the deal goes through, it would be the largest acquisition ever made by the tech giant. Google was also recently linked to a possible acquisition of HubSpot ( HUBS ), although that has reportedly moved on.

Alphabet shares are up nearly 30% year to date and were trading at $178.43 as of 11:45 a.m. ET on Friday.