Table of Contents
Alphabet Q4 2025 Earnings Preview: High Expectations for Revenue and AI Momentum
Alphabet, the parent company of Google and YouTube, releases its Q4 2025 earnings after market close today, February 4, 2026. Wall Street anticipates revenue of $111.4 billion, a 15.4% increase year-over-year, following the company's first quarter surpassing $100 billion in Q3.
Earnings per share estimates stand at $2.64, up significantly from $2.15 last year, though some forecasts like Zacks peg it at $2.58, reflecting a 20% growth. Alphabet has consistently beaten expectations, with an average surprise of 18.74% over the past four quarters, including a 26.43% beat in Q3 2025 when EPS hit $2.87 against $2.27 expected.
Key Revenue Drivers: Search, YouTube, and Surging Cloud Segment
Google Search and other revenues are projected at $61.27-$61.3 billion, up 13.4% YoY, remaining the core profit engine. YouTube ads expected to generate $11.82 billion, a 12.9% rise, while total Google advertising hits $80.97 billion, up 11.8%.
Google Cloud stands out with forecasts of $16.25 billion, a robust 35.9% growth. The segment signed more billion-dollar deals in the first nine months of 2025 than in the prior two years combined. Its Q3 backlog hit $155 billion, up $49 billion sequentially, signaling strong enterprise demand for AI infrastructure despite supply constraints into 2026.
- Total Revenue: $111.4B (+15.4% YoY)
- EPS: $2.64 (or $2.58 per Zacks)
- Google Cloud: $16.25B (+35.9%)
- Search: $61.3B (+13.4%)
- Operating Margin: 39.1% expected, aided by AI efficiencies
AI Strategy and Capital Expenditures Under Scrutiny
Investors focus on AI monetization, including Gemini model adoption and Search evolution. Alphabet's massive capex, guided at $91-93 billion for 2025, funds AI infrastructure amid the 'land grab' race. Free cash flow may contract due to these spends, but operating margins could expand via high-margin cloud and internal AI tools like Project EAT, which optimizes workflows and curbs headcount growth.
Google Cloud's acceleration and Gemini integration are key to justifying Alphabet's $4 trillion valuation after a strong 2025 rally as the top Magnificent 7 performer. Headcount rose to 191,102 from 183,323 YoY, but AI initiatives aim to improve efficiency.
Stock Implications: Room for Rally or Valuation Pressure?
GOOGL enters with tempered EPS forecasts down 0.4% recently, leaving little room for error. A beat could extend gains, but misses on cloud margins or AI updates might trigger volatility. Traffic acquisition costs rise to $16.18 billion from $14.85 billion, pressuring ad margins slightly.
Network revenues dip 1.9% to $7.80 billion, but overall ad strength persists. With Q3 backlog conversion and 2026 outlook in focus, today's results will test if AI and cloud sustain momentum.
Alphabet's earnings history shows resilience: Q2 EPS $2.31 vs $2.16 expected (+6.94%), Q1 $2.81 vs $2.02 (+39.11%). Investors await confirmation of sustained double-digit growth.