Alphabet Q4 Earnings Preview: AI, YouTube, DOJ Case Key Items To Watch As Company Goes For Eight Consecutive Revenue/EPS Beat

Alphabet Inc. (GOOGL) is set to report its fourth-quarter earnings on Tuesday, February 4, after market hours. As the company aims for its eighth consecutive beat in revenue and earnings per share (EPS), investors are eager to see how key areas like AI integration, YouTube growth, and the ongoing Department of Justice (DOJ) case will impact its financial performance. Let's dive into the crucial aspects to watch in Alphabet's upcoming earnings report.



1. AI Integration and Cloud Growth: Alphabet's AI integration across its products, particularly in Search and Cloud, has significantly impacted its financial performance. In Q4 2024, Google's search ad revenue grew by 31% year-over-year, reaching $43.4 billion. The expected operating profit margin for the Cloud business has increased from 7.6% last January to 16.2% for Q4 2024. Analysts expect the Cloud operating profit margin to hit 17.5% in 2025, with a long-term estimate of a 20% margin by the end of FY 2026. Investors should watch for updates on AI-driven features like the more conversational search engine and the broader availability of the AI-powered chatbot, as well as the Cloud business's growth trajectory.