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    • What You Need to Know Before Google Parent Alphabet Earnings
    Update Information

    What You Need to Know Before Google Parent Alphabet Earnings

    Kathleen William Posted on

    UPDATE – Oct. 28, 2024: This article has been updated to reflect more recent analyst estimates and stock price information.

    Key insights

    • Google parent Alphabet will report its third-quarter results after the market closes on Tuesday.
    • The tech giant is expected to post revenue and income growth, driven in part by its Google Cloud division.
    • Investors will likely pay attention to comments from new CFO Anat Ashkenazi, who took over the role in July.

    Google parent Alphabet (GOOGL) is set to report earnings after the market closes on Tuesday, with analysts expecting the tech giant to post growth in sales and profits.

    Alphabet is expected to report a year-over-year third-quarter revenue increase of more than 12% to $86.41 billion. Profit is expected to rise to $23.05 billion, or $1.85 per share, from $19.69 billion, or $1.55 per share, a year ago.

    Analyst estimates for the third quarter of 2024 Q2 2024 Q3 2023
    revenue $86.41 billion $84.74 billion $76.69 billion
    Earnings per share $1.85 $1.89 $1.55
    Net income $23.05 billion $23.62 billion $19.69 billion

    Key metrics: Cloud revenue and AI spending

    In the second quarter, Alphabet's results beat estimates as Google Cloud revenue rose 28% year-over-year to $10.35 billion. However, the company's shares took a hit the day after the release amid concerns over the tech giant's increased spending on artificial intelligence (AI).

    CEO Sundar Pichai told investors in the company's earnings call in July that when it comes to AI spending, “the risk of underinvestment for us here is significantly greater than the risk of overinvestment.”

    Analysts at Jefferies called AI an “emerging contributor” to Google Cloud and said that while they expect continued growth in the third quarter, AI's benefits could become more evident in 2025 and 2026. Visible Alpha analysts' consensus for Google Cloud third-quarter revenue is $10.87 billion, which would represent growth of 29%.

    Business Spotlight: New CFO Commentary

    Anat Ashkenazi took over as Alphabet's chief financial officer on July 31, which could open the door for new disclosures after the former Eli Lilly (LLY) executive took over in the first quarter, Bank of America analysts said.

    Potential third-quarter positives that the new CFO could address include the strength of Google search, which suggests AI is leading to higher monetization, YouTube benefiting from political spending and new advertising opportunities, analysts said.

    Shares of Alphabet have risen over 19% since the beginning of the year to $166.72 at Monday's close.

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    Kathleen William
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