Alphabet to Report Q2 Earnings: What's in Store for the Stock?

Core Insights - Alphabet's second-quarter 2025 results are anticipated to show strong performance driven by growth in Search, Cloud, and advertising sectors [1] Advertising Revenue - In the first quarter of 2025, Google advertising revenues increased by 8.5% year over year to $66.885 billion, representing 74.1% of total revenues [2] - Search and other revenues, which account for 75.8% of advertising revenues, grew by 9.8% year over year to $50.702 billion [2] - YouTube's advertising revenues rose by 10.3% year over year to $8.972 billion [2] - The Zacks Consensus Estimate for advertising revenues in the upcoming quarter is $69.023 billion, indicating a 6.8% growth compared to the previous year [3] - The company has a history of exceeding earnings estimates, with an average surprise of 14.64% over the last four quarters [3] Search Business - Alphabet's integration of Generative AI technology into its search engine is enhancing Google Search's performance [5] - AI Overviews have led to over a 10% increase in usage for queries supporting this feature in major markets like India and the United States [6] - The market share for Google in the search engine space was 89.54% from June 2024 to June 2025, significantly ahead of competitors like Microsoft Bing and YANDEX [7] - The Zacks Consensus Estimate for Search and other revenues is currently $52.4 billion, suggesting an 8% growth year over year [8] Cloud Revenue - Google Cloud revenues are projected to grow by 26% year over year to $13.04 billion, supported by partnerships with NVIDIA and advancements in AI tools [9][11] - Google Cloud is positioned as the third-largest provider in the competitive cloud infrastructure market, competing with Microsoft Azure and Amazon Web Services [9] - The introduction of new technologies and tools, such as the Agent Development Kit and low-code offerings, is enhancing Google Cloud's appeal to enterprises [10]