Alphabet, the parent company of Google and YouTube, is on the verge of announcing its fourth-quarter financial results. Industry analysts and traders are keenly anticipating this report, expecting a notable shift in the company's stock value, potentially propelling it to new record highs. This comes amidst a broader conversation within the technology sector regarding the substantial investments in artificial intelligence and the expected returns from these ventures.
Following the market close on Wednesday, Alphabet is slated to disclose its financial performance for the last quarter. Market participants are closely watching, with options pricing indicating a potential fluctuation of over 5% in the stock from Monday's closing price of just under $345 by the week's end. This could see the stock either dip to approximately $328 or ascend to around $362, further extending its impressive streak of record-setting valuations.
Earlier in the year, Alphabet's stock already established multiple new record peaks. The company's shares have surged by about 25% since its last quarterly announcement in late October, a period during which Alphabet not only exceeded earnings expectations but also crossed the $100 billion revenue threshold for the first time in its history.
This sustained upward trend in Alphabet's stock value occurs despite ongoing market scrutiny concerning the expenditures and investment yields of AI technologies, issues that have affected other major tech companies recently. In contrast, the financial disclosures from competitors like Meta Platforms and Microsoft last week led to divergent stock performances, as both indicated continued substantial spending on AI initiatives.
For the fourth quarter, analysts forecast Alphabet's revenue to reach $111.37 billion, marking a 15% increase year-over-year. Concurrently, adjusted earnings per share are projected to climb by more than 20% to $3.09. HSBC analysts have highlighted several key areas they will be monitoring in the upcoming earnings call. These include executive insights into the expansion of Google Cloud's capacity to cater to AI demand, growth metrics for overall search activities and Google's AI models, projections for Alphabet's capital expenditures in 2026, and updates on Apple's integration of Google Gemini for its enhanced Siri and other AI functionalities.
The sentiment among analysts regarding Alphabet's stock is predominantly positive. Of the 15 analysts whose current ratings are tracked by Visible Alpha, a significant majority—12—recommend a 'buy' rating, while the remaining three advise a 'hold'. Furthermore, analysts anticipate the stock will continue to achieve new record highs, with Visible Alpha's average price target set at $350.
In summary, Alphabet is approaching its fourth-quarter earnings report with high expectations for continued growth and stock appreciation, driven by robust revenue forecasts and strategic AI investments, all while maintaining strong analyst confidence.