Tech giant and Google parent Alphabet (GOOGL) is scheduled to announce its fourth-quarter results after the stock market closes on Tuesday, February 4. GOOGL shares have rallied about 35% over the past year on optimism about the benefits of artificial intelligence (AI) integration across the company’s Search and Cloud businesses and the momentum in YouTube. Analysts expect Alphabet to report Q4 earnings per share (EPS) of $2.13, reflecting a year-over-year increase of about 30%.
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Further, Wall Street expects Alphabet’s revenue to rise 12% to $96.68 billion. The company has exceeded analysts’ earnings expectations for seven consecutive quarters.
Analysts’ Views Ahead of GOOGL’s Q4 Results
Ahead of GOOGL’s Q4 results, Bernstein analyst Mark Shmulik increased the price target for GOOGL stock to $210 from $185 and reiterated a Hold rating. The analyst said that despite his cautious outlook on Google Search, he is “mostly constructive on the 4Q setup.” Shmulik expects Google Search’s year-over-year growth to remain steady at about 11%, though he cautioned about forex headwinds.
Further, Shmulik expects YouTube to continue its re-acceleration, thanks to encouraging political ad spend and CTV tailwinds. Excluding ads, the analyst believes that Cloud growth is a key reason to view GOOGL stock as a potential “AI winner.” However, he warned that any slowdown in incremental Cloud dollars may impact the bull case. Despite some positives, Shmulik remains on the sidelines on GOOGL stock due to regulatory and competitive risks.
Meanwhile, KeyBanc analyst Justin Patterson reiterated a Buy rating on GOOGL stock with a price target of $225. Patterson believes that Alphabet ended Q4 2024 on a strong note. He added that the company witnessed a solid year of product innovation related to AI and quantum computing, with these strengths expected to continue in 2025. Patterson thinks that while concerns around Google Search due to the Department of Justice (DoJ) trial and growing competition persist, he sees strength in Google Cloud, Waymo, and margins.
Here’s What Options Traders Expect
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 6.3% move in either direction in reaction to GOOGL’s Q4 2024 results.
Is GOOGL Stock a Buy, Sell, or Hold?
Wall Street is cautiously optimistic on GOOGL stock, with a Moderate Buy consensus rating based on 21 Buys and eight Holds. At $219, the average GOOGL stock price target implies 7.3% upside potential from current levels.
