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The company has been benefiting from growing investments in the generative AI technology, expanding presence in the booming cloud-computing market, increasing efforts to improve search results, solid uptake of Android and deepening focus on the wearables category in the quarter under review.
Nevertheless, increasing litigation issues and expenses are likely to have been concerning.
Let us delve deeper into the fundamentals of Alphabet ahead of its first-quarter 2024 results.
Alphabet’s continued efforts toward innovation in AI techniques for the advancement of its search business are expected to have continued aiding its search revenues in the first quarter.
The Search Generative Experience, which leverages the generative AI technology to make search results more natural and intuitive, is likely to have contributed well. With the large language model-powered enhanced search results, Google is anticipated to have driven its search momentum in the quarter under review.
Large language models, coupled with multi-search and visual exploration features, are expected to have continued improving the search results.
Growing momentum with Bard is anticipated to have contributed well to Search revenues in the first quarter.
Improving features of Google Maps are expected to have benefited the search traffic.
The Zacks Consensus Estimate for Google Search & Other revenues is pegged at $44.73 billion, indicating an increase of 10.8% from the year-ago quarter’s reported figure.
Apart from this, Google’s growing advertisement offerings, infused with generative AI technology, are expected to have contributed well to its advertising revenues in the first quarter. Solid momentum in the retail vertical is anticipated to have been a plus.
The consensus mark for Google advertising is pegged at $60.18 billion, implying growth of 10.3% from the prior-year quarter’s reported figure.
Coming to non-advertisement revenues of YouTube, strengthening user momentum in YouTube Shorts is likely to have been a tailwind. Google’s growing efforts to bolster relationships with content creators are likely to have acted as a positive.
Solid momentum across YouTubeTV and major updates in YouTube Premium are likely to have been other positives.
The growing momentum across Android and Pixel devices is expected to have benefited Alphabet’s performance in the to-be-reported quarter.
The above-mentioned factors are anticipated to have benefited Google’s Services segment’s performance in the first quarter.
The Zacks Consensus Estimate for Google Services revenues is pegged at $69.04 billion, indicating growth of 11.4% from the year-ago reported figure.
Strength in Cloud & Other Bets to Benefit
Alphabet has been significantly gaining momentum in the highly competitive cloud market for a while on the back of its expanding cloud service portfolio and an increasing number of data centers.
The solid adoption of Google Cloud Platform and Google Workspace is likely to have contributed well to the performance of the Google Cloud segment in the to-be-reported quarter.
Its strengthening generative AI-backed cloud offerings are expected to have driven Google’s momentum among cloud customers.
Alphabet’s strengthening efforts to bolster its healthcare technology portfolio are expected to have driven growth in its Other Bets segment in the first quarter.
The Zacks Consensus Estimate for Other Bets revenues is pegged at $384 million, suggesting growth of 33.3% from the year-ago quarter’s reported figure.
Estimate Trend
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $66.02 billion, indicating an improvement of 13.7% from the year-ago reported number.
The consensus mark for earnings is pegged at $1.49, indicating 27.3% growth from the previous year’s reported figure. The figure has been unchanged over the past 30 days.
What Our Model Says
Our proven model predicts an earnings beat for Alphabet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you will see below.
Alphabet has an Earnings ESP of +1.43%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GOOGL carries a Zacks Rank #3 at present.
Other Stocks to Consider
Here are some other companies that, too, per our model, have the right combination of elements to post an earnings beat in the soon-to-be-reported quarterly results.
Image: Bigstock
Should You Consider Alphabet (GOOGL) Ahead of Q1 Earnings?
Alphabet (GOOGL - Free Report) is scheduled to report first-quarter 2024 results on Apr 25.
The company has been benefiting from growing investments in the generative AI technology, expanding presence in the booming cloud-computing market, increasing efforts to improve search results, solid uptake of Android and deepening focus on the wearables category in the quarter under review.
Nevertheless, increasing litigation issues and expenses are likely to have been concerning.
Let us delve deeper into the fundamentals of Alphabet ahead of its first-quarter 2024 results.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Search, YouTube & Ad Efforts to Consider
Alphabet’s continued efforts toward innovation in AI techniques for the advancement of its search business are expected to have continued aiding its search revenues in the first quarter.
The Search Generative Experience, which leverages the generative AI technology to make search results more natural and intuitive, is likely to have contributed well. With the large language model-powered enhanced search results, Google is anticipated to have driven its search momentum in the quarter under review.
Large language models, coupled with multi-search and visual exploration features, are expected to have continued improving the search results.
Growing momentum with Bard is anticipated to have contributed well to Search revenues in the first quarter.
Improving features of Google Maps are expected to have benefited the search traffic.
The Zacks Consensus Estimate for Google Search & Other revenues is pegged at $44.73 billion, indicating an increase of 10.8% from the year-ago quarter’s reported figure.
Apart from this, Google’s growing advertisement offerings, infused with generative AI technology, are expected to have contributed well to its advertising revenues in the first quarter. Solid momentum in the retail vertical is anticipated to have been a plus.
The consensus mark for Google advertising is pegged at $60.18 billion, implying growth of 10.3% from the prior-year quarter’s reported figure.
Coming to non-advertisement revenues of YouTube, strengthening user momentum in YouTube Shorts is likely to have been a tailwind. Google’s growing efforts to bolster relationships with content creators are likely to have acted as a positive.
Solid momentum across YouTubeTV and major updates in YouTube Premium are likely to have been other positives.
The growing momentum across Android and Pixel devices is expected to have benefited Alphabet’s performance in the to-be-reported quarter.
The above-mentioned factors are anticipated to have benefited Google’s Services segment’s performance in the first quarter.
The Zacks Consensus Estimate for Google Services revenues is pegged at $69.04 billion, indicating growth of 11.4% from the year-ago reported figure.
Strength in Cloud & Other Bets to Benefit
Alphabet has been significantly gaining momentum in the highly competitive cloud market for a while on the back of its expanding cloud service portfolio and an increasing number of data centers.
The solid adoption of Google Cloud Platform and Google Workspace is likely to have contributed well to the performance of the Google Cloud segment in the to-be-reported quarter.
Its strengthening generative AI-backed cloud offerings are expected to have driven Google’s momentum among cloud customers.
Alphabet’s strengthening efforts to bolster its healthcare technology portfolio are expected to have driven growth in its Other Bets segment in the first quarter.
The Zacks Consensus Estimate for Other Bets revenues is pegged at $384 million, suggesting growth of 33.3% from the year-ago quarter’s reported figure.
Estimate Trend
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $66.02 billion, indicating an improvement of 13.7% from the year-ago reported number.
The consensus mark for earnings is pegged at $1.49, indicating 27.3% growth from the previous year’s reported figure. The figure has been unchanged over the past 30 days.
What Our Model Says
Our proven model predicts an earnings beat for Alphabet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you will see below.
Alphabet has an Earnings ESP of +1.43%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GOOGL carries a Zacks Rank #3 at present.
Other Stocks to Consider
Here are some other companies that, too, per our model, have the right combination of elements to post an earnings beat in the soon-to-be-reported quarterly results.
Amazon (AMZN - Free Report) has an Earnings ESP of +11.66% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.
Amazon shares have gained 14.9% year to date. AMZN is set to report its first-quarter 2024 results on Apr 30.
Meta Platforms (META - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank #2 at present.
Meta shares have gained 36.1% year to date. META is set to report its first-quarter 2024 results on Apr 24.
Itron (ITRI - Free Report) has an Earnings ESP of +5.88% and has a Zacks Rank of 2 at present.
Itron shares have gained 18.7% year to date. ITRI is set to report its first-quarter 2024 results on May 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.