Alphabet (GOOGL) Q4 2025 Earnings Preview: AI Spending and Advertising in Focus
Alphabet Inc. (GOOGL) is set to report its Q4 2025 earnings on February 4, with Wall Street anticipating a 23% year-over-year increase in earnings per share to $2.64 and revenue growth of 15.4% to $111.3 billion. The spotlight remains on advertising revenue, particularly the performance of Search and YouTube, as investors seek clarity on monetization strategies for AI-powered search.
Google Cloud's remarkable turnaround, with margins hitting 23.7% in Q3, underscores the company's shift from losses in 2019 to solid profitability. However, the narrative is dominated by Alphabet's aggressive AI investments, with $91-93 billion earmarked for 2025 and even higher spending planned for 2026 to maintain its competitive edge.
Analysts maintain a Strong Buy rating, with an average price target of $352.46, suggesting 4.3% upside potential. The earnings report could dictate market sentiment for months, especially as competition intensifies in both advertising and AI sectors.