This article first appeared on GuruFocus.
Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) reports third-quarter 2025 results after the market closes on October 29. Wall Street expects EPS of $2.26 and revenue near $85 billion, implying steady mid-teens growth. The stock is up more than 40% year-to-date, outpacing both the S&P 500 and Nasdaq.
Last quarter, results were driven mostly by Search and YouTube ads. Yet the market’s focus has shifted to the company’s AI initiatives across Search, YouTube, and Cloud. At its recent Google Next event, management showcased AI-powered tools such as Gemini for Workspace and Vertex AI enhancements for enterprise clients. Investors will want evidence that these initiatives are starting to generate incremental revenue rather than remaining a cost center.
Another question investors will be looking at is the investment spent toward AI. Last quarter, FCF came to $5.3 billion, down 61%, mainly due to a 70% increase in Capex from a year ago. Guidance on 2026 capital expenditure for data centers will also matter, given rising infrastructure spending from hyperscalers like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). Lastly, analysts will look for updates on Cloud margins, Search pricing, and YouTube engagement as competition from TikTok, OpenAI’s ChatGPT Atlas browser, and AI search intensifies.
