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For third-quarter 2026, the Zacks Consensus Estimate for earnings is pegged at $2.94 per share, up by a penny over the past 30 days, and indicating 2.44% year-over-year growth.
The consensus mark for third-quarter revenues is pegged at $111.64 billion, implying growth of 27.63% from the year-ago quarter’s reported figure.
Alphabet has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, with the average surprise being 86.65%.
Consensus Estimate Trend
Image Source: Zacks Investment Research
Let’s see how things have shaped up for the upcoming announcement:
Cloud & Search to Aid GOOGL’s Q3 Top-Line Growth
Alphabet’s third-quarter 2026 results are expected to have benefited from accelerating Google Cloud adoption, supported by strong demand for AI infrastructure, enterprise AI solutions and core Google Cloud Platform (GCP) services. In the second quarter of 2026, cloud revenues surged 82% year over year to $24.77 billion, while cloud backlog reached $514 billion, increasing by more than $50 billion sequentially. Cloud revenues are also expected to have benefited from expanding customer relationships, rising consumption and demand for Google’s custom Tensor Processing Units (TPUs) systems.
Google Search & Other is expected to have remained a key revenue contributor in the third quarter, driven by increasing search activity, healthy advertiser spending and AI-powered advertising improvements. In the second quarter of 2026, Search & Other revenues increased 17% year over year to $63.27 billion, primarily supported by retail and financial services advertisers. AI Overviews and AI Mode have been driving incremental search queries, while AI Max and Performance Max are helping advertisers improve campaign effectiveness. However, GOOGL cautioned that third-quarter growth comparisons would become tougher as Alphabet laps the acceleration in Search performance that began in third-quarter 2025.
Alphabet’s third-quarter 2026 performance is likely to have benefited from growth in YouTube advertising, supported by direct-response campaigns, brand advertising, Shorts and connected television. YouTube advertising revenues increased 13% year over year to $11.06 billion in the second quarter of 2026, reflecting strength across direct-response and brand campaigns. AI-powered Demand Gen campaigns, creator partnerships and new advertising formats are improving advertisers’ ability to reach audiences across YouTube and Shorts. The growing popularity of connected television and increasingly effective shopping experiences are also expected to have supported advertising monetization.
Increasing adoption of Gemini across consumer and enterprise applications is expected to have supported Alphabet's third-quarter performance. In the second quarter of 2026, Gemini API usage reached approximately 22 billion tokens per minute, up from more than 16 billion in the preceding quarter. The Gemini application reached 950 million monthly active users, while more than 9 million developers were building with Google's models each month. Strong adoption of Gemini Enterprise, AI development tools and model APIs is creating additional monetization opportunities across Google Cloud, Workspace and other services.
However, higher depreciation, energy expenses, data center operating costs and AI-related hiring are expected to have pressured operating margins. GOOGL also anticipated modest near-term margin pressure from using third-party cloud capacity in the third quarter.
GOOGL Shares Lag Sector, Trades at a Premium
Alphabet’s shares have climbed 3.8% year to date (YTD), underperforming the broader Zacks Computer & Technology sector’s return of 18%. Alphabet shares have underperformed peers including Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) over the same timeframe. Shares of Apple, Amazon and Microsoft have returned 28%, 8.6% and 7.8%, respectively, YTD.
GOOGL Stock’s Price Performance
Image Source: Zacks Investment Research
GOOGL shares are overvalued, as suggested by Value Score C.
Currently, GOOGL is trading at a premium, with a forward 12-month price/sales of 7.38X compared with the broader sector’s 5.72X and Amazon’s 2.91X. However, Alphabet shares trade at a discount compared with Microsoft’s 9.37X and Apple’s 9.70X.
GOOGL Shares Trade at a Premium
Image Source: Zacks Investment Research
GOOGL’s Prospects Ride AI Push & Cloud
Alphabet’s prospects are supported by its integrated AI portfolio spanning custom accelerators, Gemini models, data analytics, cybersecurity and enterprise applications. Google management has highlighted more than 17 product lines generating over $1 billion each in revenue. The company is gaining traction across enterprise AI infrastructure, BigQuery, Gemini Enterprise and Workspace, enabling opportunities to expand customer spending. Alphabet also highlighted that customers using Google’s AI products consume 1.8 times as many products as non-AI customers, indicating significant cross-selling potential.
Growing demand for AI training and inference represents a major long-term opportunity for Alphabet’s infrastructure business. The company's custom TPUs, Axion CPUs and NVIDIA GPU offerings provide customers with multiple computing options. Alphabet is also commercializing TPU systems through cloud subscriptions, direct hardware sales and neocloud partnerships.
Increasing enterprise adoption of agentic AI is expected to strengthen Alphabet’s long-term growth prospects. Gemini Enterprise enables organizations to build autonomous agents, analyze proprietary data, automate business processes and improve operational efficiency. Alphabet has stated that more than 90% of Fortune 100 companies have been using Gemini Enterprise, and the platform is gaining adoption across financial services, retail, insurance and other industries.
Buy GOOGL Ahead of Q3
Alphabet’s third-quarter 2026 performance is expected to have benefited from robust Google Cloud demand, growing AI adoption, sustained Search advertising momentum and improving YouTube monetization. The company's expanding Cloud backlog, growing enterprise customer base and increasing adoption of Gemini-powered solutions are encouraging. Despite a premium valuation, Alphabet’s full-stack AI strategy, expanding TPU business, enterprise AI adoption and new advertising opportunities offer plenty of growth opportunities for investors.
View the Zacks #1 Rank List
Image: Bigstock
Pre-Q3 Earnings: Is Alphabet Stock a Portfolio Must-Have?
Key Takeaways
Alphabet (GOOGL - Free Report) is set to report third-quarter 2026 results on Oct. 28.
For third-quarter 2026, the Zacks Consensus Estimate for earnings is pegged at $2.94 per share, up by a penny over the past 30 days, and indicating 2.44% year-over-year growth.
The consensus mark for third-quarter revenues is pegged at $111.64 billion, implying growth of 27.63% from the year-ago quarter’s reported figure.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Alphabet has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, with the average surprise being 86.65%.
Consensus Estimate Trend
Image Source: Zacks Investment Research
Let’s see how things have shaped up for the upcoming announcement:
Cloud & Search to Aid GOOGL’s Q3 Top-Line Growth
Alphabet’s third-quarter 2026 results are expected to have benefited from accelerating Google Cloud adoption, supported by strong demand for AI infrastructure, enterprise AI solutions and core Google Cloud Platform (GCP) services. In the second quarter of 2026, cloud revenues surged 82% year over year to $24.77 billion, while cloud backlog reached $514 billion, increasing by more than $50 billion sequentially. Cloud revenues are also expected to have benefited from expanding customer relationships, rising consumption and demand for Google’s custom Tensor Processing Units (TPUs) systems.
Google Search & Other is expected to have remained a key revenue contributor in the third quarter, driven by increasing search activity, healthy advertiser spending and AI-powered advertising improvements. In the second quarter of 2026, Search & Other revenues increased 17% year over year to $63.27 billion, primarily supported by retail and financial services advertisers. AI Overviews and AI Mode have been driving incremental search queries, while AI Max and Performance Max are helping advertisers improve campaign effectiveness. However, GOOGL cautioned that third-quarter growth comparisons would become tougher as Alphabet laps the acceleration in Search performance that began in third-quarter 2025.
Alphabet’s third-quarter 2026 performance is likely to have benefited from growth in YouTube advertising, supported by direct-response campaigns, brand advertising, Shorts and connected television. YouTube advertising revenues increased 13% year over year to $11.06 billion in the second quarter of 2026, reflecting strength across direct-response and brand campaigns. AI-powered Demand Gen campaigns, creator partnerships and new advertising formats are improving advertisers’ ability to reach audiences across YouTube and Shorts. The growing popularity of connected television and increasingly effective shopping experiences are also expected to have supported advertising monetization.
Increasing adoption of Gemini across consumer and enterprise applications is expected to have supported Alphabet's third-quarter performance. In the second quarter of 2026, Gemini API usage reached approximately 22 billion tokens per minute, up from more than 16 billion in the preceding quarter. The Gemini application reached 950 million monthly active users, while more than 9 million developers were building with Google's models each month. Strong adoption of Gemini Enterprise, AI development tools and model APIs is creating additional monetization opportunities across Google Cloud, Workspace and other services.
However, higher depreciation, energy expenses, data center operating costs and AI-related hiring are expected to have pressured operating margins. GOOGL also anticipated modest near-term margin pressure from using third-party cloud capacity in the third quarter.
GOOGL Shares Lag Sector, Trades at a Premium
Alphabet’s shares have climbed 3.8% year to date (YTD), underperforming the broader Zacks Computer & Technology sector’s return of 18%. Alphabet shares have underperformed peers including Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) over the same timeframe. Shares of Apple, Amazon and Microsoft have returned 28%, 8.6% and 7.8%, respectively, YTD.
GOOGL Stock’s Price Performance
Image Source: Zacks Investment Research
GOOGL shares are overvalued, as suggested by Value Score C.
Currently, GOOGL is trading at a premium, with a forward 12-month price/sales of 7.38X compared with the broader sector’s 5.72X and Amazon’s 2.91X. However, Alphabet shares trade at a discount compared with Microsoft’s 9.37X and Apple’s 9.70X.
GOOGL Shares Trade at a Premium
Image Source: Zacks Investment Research
GOOGL’s Prospects Ride AI Push & Cloud
Alphabet’s prospects are supported by its integrated AI portfolio spanning custom accelerators, Gemini models, data analytics, cybersecurity and enterprise applications. Google management has highlighted more than 17 product lines generating over $1 billion each in revenue. The company is gaining traction across enterprise AI infrastructure, BigQuery, Gemini Enterprise and Workspace, enabling opportunities to expand customer spending. Alphabet also highlighted that customers using Google’s AI products consume 1.8 times as many products as non-AI customers, indicating significant cross-selling potential.
Growing demand for AI training and inference represents a major long-term opportunity for Alphabet’s infrastructure business. The company's custom TPUs, Axion CPUs and NVIDIA GPU offerings provide customers with multiple computing options. Alphabet is also commercializing TPU systems through cloud subscriptions, direct hardware sales and neocloud partnerships.
Increasing enterprise adoption of agentic AI is expected to strengthen Alphabet’s long-term growth prospects. Gemini Enterprise enables organizations to build autonomous agents, analyze proprietary data, automate business processes and improve operational efficiency. Alphabet has stated that more than 90% of Fortune 100 companies have been using Gemini Enterprise, and the platform is gaining adoption across financial services, retail, insurance and other industries.
Buy GOOGL Ahead of Q3
Alphabet’s third-quarter 2026 performance is expected to have benefited from robust Google Cloud demand, growing AI adoption, sustained Search advertising momentum and improving YouTube monetization. The company's expanding Cloud backlog, growing enterprise customer base and increasing adoption of Gemini-powered solutions are encouraging. Despite a premium valuation, Alphabet’s full-stack AI strategy, expanding TPU business, enterprise AI adoption and new advertising opportunities offer plenty of growth opportunities for investors.
Alphabet currently has a Zacks Rank #2 (Buy), suggesting that it may be wise to buy the stock ahead of third-quarter earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.