Strategic Partnerships Expand Gemini’s Reach
Alphabet has moved aggressively to extend its Gemini generative-AI models through external alliances. In January, the company announced:
- A deal with Walmart to embed a shopping experience inside the Gemini chatbot, enabling users to search for and purchase products directly through conversational interactions.
- An agreement with Apple that will integrate Gemini models into forthcoming Apple Intelligence features, including an upgraded Siri voice assistant scheduled for release in 2026.
The collaborations come amid intensifying competition in generative AI, where rivals such as Microsoft-backed OpenAI and Meta Platforms are also investing heavily.
Consensus Targets for Fourth-Quarter Results
Market consensus compiled by Investing.com calls for Alphabet to report revenue of US$111.07 billion and earnings of US$2.63 per diluted share for the December quarter. The company generated US$102.35 billion of revenue in the corresponding period a year earlier, when adjusted earnings reached US$3.10 a share, both above analyst estimates at the time.
Bank of America Projects “Upside Quarter”
In a research note cited by industry observers, Bank of America analysts Justin Post and Nitin Bansal reiterated a “buy” rating on Alphabet and lifted their 12-month price objective to US$370 in January, up from US$335. Ahead of the upcoming earnings release, the analysts said they now anticipate an “upside quarter,” attributing their stance to rising usage across Google’s search and cloud platforms.
Based on recent commentary from Meta Platforms, which reported stronger-than-anticipated AI spending plans for 2026, Bank of America forecasts that Alphabet’s search revenue could exceed the Street view by 13 percent, while Google Cloud revenue might surpass expectations by 35 percent.
Cloud Momentum and Capital-Expenditure Outlook
Alphabet’s cloud division posted 34 percent year-over-year growth in the third quarter, delivering US$15.2 billion in revenue and reinforcing its position as the fastest-growing major business line. During the Q3 earnings call on October 30, Chief Financial Officer Anat Ashkenazi said the company had “repeatedly” raised its capital-spending plans in 2025 and signaled an even larger outlay in 2026, promising additional details with the forthcoming fourth-quarter update.
The emphasis on capital expenditure underscores Alphabet’s commitment to scaling data-center capacity and specialized silicon to support AI workloads, a theme echoed across the technology sector as demand for generative-AI services accelerates.
Historical Earnings Beat Sets Precedent
Alphabet has exceeded Wall Street projections in recent quarters. For the three months ended September 30, revenue advanced 16 percent year over year to US$102.35 billion, ahead of the consensus estimate of US$99.89 billion. Adjusted earnings of US$3.10 per share easily topped the US$2.33 analysts had expected, prompting a 2.5 percent gain in the stock on the following trading day.
Imagem: Internet
Key Metrics Investors Will Watch
When Alphabet posts results on February 4, investors and analysts are likely to focus on:
- The pace of advertising-revenue recovery, particularly in search and YouTube.
- Growth rates in Google Cloud, including operating-margin performance as the segment approaches sustained profitability.
- Updates on capital-expenditure guidance for 2026, with emphasis on data-center and AI-hardware investments.
- Management commentary on Gemini adoption and the monetization of AI features across product lines.
Comparative Landscape
The broader technology sector has entered the current earnings season with elevated expectations after robust reports from peers. Meta Platforms delivered stronger-than-forecast revenue and projected higher AI-related spending, Microsoft recently highlighted sustained cloud demand, and Nvidia continues to benefit from sales of graphics processing units used in AI training.
Alphabet’s ability to translate its AI investments into revenue growth and margin expansion remains a focal point for the market, especially as competition for talent, computing resources, and enterprise customers intensifies.
Valuation and Analyst Sentiment
At the February 2 close, Alphabet traded just below its January record, pricing the company at roughly US$4 trillion. Despite the lofty capitalization, Bank of America maintains that the shares have additional room to appreciate, citing accelerating product usage, a diversified revenue base, and the potential for incremental profitability in cloud services.
Other Wall Street firms have echoed a positive outlook, although price targets vary. The consensus rating on the stock remains “buy,” supported by expectations that advertising growth will rebound and AI monetization avenues will expand throughout 2026.
Looking Ahead
Alphabet is scheduled to host its earnings conference call shortly after releasing results on February 4. Market participants will seek clarity on how management plans to balance heightened capital spending with shareholder returns, as well as details on the rollout of Gemini-powered features across Android, Chrome, Google Workspace, and new hardware devices.
Until the figures arrive, investors are digesting Waymo’s latest fundraising milestone, the Walmart and Apple partnerships, and Bank of America’s conviction that an “upside quarter” is imminent.
Crédito da imagem: Getty Images
