Alphabet earnings focus on search durability and cloud momentum amid AI shift

Core Viewpoint - Alphabet is experiencing growth in its cloud business while facing challenges in its core search segment, with AI developments playing a crucial role in both areas [2][4][5] Cloud Business - Google's cloud segment is gaining momentum, particularly as Amazon Web Services is losing ground, highlighted by a $10 billion contract with Meta and the acquisition of workloads from Anthropic [3] - Truist anticipates over 30% growth in Google's cloud business this quarter, driven by strong enterprise demand and a robust pipeline [3] - Bank of America supports this outlook, emphasizing the increasing value of cloud contributions to Alphabet's stock [4] Search Business - The search segment is under scrutiny as AI technologies may disrupt Google's traditional dominance, with Truist projecting a slight deceleration in global search and other revenue growth to 11% year-over-year [4] - Despite the challenges, queries leading to purchases remain a stronghold for Google, even as competitors like OpenAI and Perplexity gain traction in casual browsing [4] AI Integration - A key focus for investors is whether Alphabet can demonstrate that AI is enhancing its core business rather than undermining it [5] - Bank of America expects solid growth in paid clicks and suggests that increased usage of Gemini could mitigate disruption risks [5] - Investors are looking for evidence of both engagement and monetization improvements [5]