Google's Ad Momentum And AI Push Could Power Big Quarter, Analyst Says

Core Viewpoint - Alphabet Inc is expected to report strong Q3 revenue growth despite facing $3.9 billion in one-time legal charges, including a significant EU fine of $3.5 billion [1][3] Revenue and Earnings Estimates - Q3 revenue is estimated at $86 billion, slightly above the Street consensus of $85 billion, while EPS is adjusted down to $2.17 from $2.29 [3] - For Q4, revenue is projected at $93.8 billion and EPS at $2.59, both slightly ahead of consensus [3] Advertising Performance - The growth in Q3 revenue is attributed to robust digital ad spending, with advertising demand exceeding expectations [2] - Search revenue is expected to rise by 12% year-over-year, with paid clicks growing by 4%-5% due to improved engagement quality and AI-driven traffic shifts [4][8] YouTube and Cloud Developments - YouTube is benefiting from AI-powered creative tools and interactive ad formats, enhancing ad performance and targeting [5] - The Cloud segment is maintaining solid momentum with recent customer wins contributing to backlog [5] Future Outlook and Strategic Focus - The company plans to emphasize Gemini AI adoption, new ad monetization formats, and cost discipline in its upcoming earnings call [6] - Regulatory clarity following the DOJ ruling could alleviate concerns regarding AI disruption in Search, supporting long-term growth [7]