Should You Buy, Sell or Hold Alphabet Stock Before Q1 Earnings?
Alphabet GOOGL is set to report first-quarter 2026 results on April 29. For first-quarter 2026, the Zacks Consensus Estimate for earnings is pegged at $2.64 per share, unchanged over the past 30 days, and indicates a 6.1% year-over-year decline. The consensus mark for first-quarter revenues is pegged at $92.22 billion, indicating growth of 20.6% from…
Alphabet GOOGL is set to report first-quarter 2026 results on April 29.
For first-quarter 2026, the Zacks Consensus Estimate for earnings is pegged at $2.64 per share, unchanged over the past 30 days, and indicates a 6.1% year-over-year decline.
The consensus mark for first-quarter revenues is pegged at $92.22 billion, indicating growth of 20.6% from the year-ago quarter’s reported figure.
Alphabet has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 20.82%.
Consensus Estimate Trend
Zacks Investment Research
Image Source: Zacks Investment Research
Let’s see how things have shaped up for the upcoming announcement:
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Growing AI Usage in Search & Cloud to Aid GOOGL’s Q1 Results
GOOGL’s Search business is benefiting from AI infusion. Alphabet has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. The company integrated Gemini 3 directly into AI Mode in Search, which is driving engagement. Alphabet has introduced Personal Intelligence in AI Mode in Search (January 2026) and the Gemini app. GOOGL is now expanding Personal Intelligence in the United States across AI Mode in Search, the Gemini app and Gemini in Chrome.
AI Mode strengthens Alphabet’s core business. It is driving higher user engagement, with longer and more complex queries, which are easier to monetize. Importantly, AI Mode expands the scope of search rather than replacing it, creating incremental growth opportunities. Upgradation of AI Overviews to Gemini 3 is offering users a best-in-class AI response at the top of the search results page. GOOGL has made the transition from an AI overview to a conversation in AI Mode completely seamless. This is driving up user experience as well as engagement. GOOGL’s AI push is expected to boost competitive prowess against the likes of Microsoft MSFT, Bing and Baidu BIDU.
Alphabet’s continued growth and expansion in AI and Search technologies is expected to have benefited the company’s performance in the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter 2026 Search and other revenues is pegged at $59.66 billion, indicating 17.7% growth over the figure reported in the year-ago quarter.
Meanwhile, Alphabet’s Google Cloud is experiencing high demand for its enterprise AI products, including its custom TPUs, GPUs and industry-leading AI models like Gemini 3. Google Cloud is benefiting from strong Gen AI adoption due to leading models, including Gemini, Imagen, Veo, Chirp and Lyria. An expanding clientele is expected to help Alphabet face stiff competition from the likes of Microsoft and Amazon AMZN. The consensus mark for first-quarter 2026 Google Cloud revenues is pegged at $18.397 billion, indicating 50% growth over the figure reported in the year-ago quarter.
GOOGL Shares Outperform Sector, Industry
Alphabet’s shares have climbed 10% year to date (YTD), outperforming the Zacks Internet Services industry and the Zacks Computer & Technology sector. Over the same time frame, the sector and industry have returned 7.8% and 8.8%, respectively.Alphabet shares have underperformed Amazon but outperformed Baidu and Microsoft. While Amazon shares have jumped 13.9% YTD, Baidu and Microsoft dropped 2.1% and 12.4%, respectively.
GOOGL Stock’s Price Performance
Zacks Investment Research
Image Source: Zacks Investment Research
GOOGL shares are overvalued, as suggested by Value Score D.
Currently, GOOGL is trading at a premium, with a forward 12-month price/sales of 9.66X compared with the Zacks Internet Services industry’s 7.8X, Microsoft’s 8.61X, Baidu’s 2.12X and Amazon’s 3.39X.
GOOGL Shares Trade at a Premium
Zacks Investment Research
Image Source: Zacks Investment Research
GOOGL Benefits From AI Push & Acquisitions
Alphabet’s Google Search is riding on a strong AI push. AI Mode strengthens Alphabet’s core business. It is driving higher user engagement, with longer and more complex queries, which are easier to monetize. Importantly, AI Mode expands the scope of search rather than replacing it, creating incremental growth opportunities. Upgradation of AI Overviews to Gemini 3 is offering users a best-in-class AI response at the top of the search results page. AI Mode also unlocks new advertising formats and supports the evolution of AI-driven commerce, where users can discover and potentially complete purchases within the search experience. Combined with Gemini’s growing adoption and integration across products, this positions Alphabet to deepen its competitive advantage.
Alphabet is riding on a strong Google Cloud Platform (GCP) prospect, which accounted for 14.6% of GOOGL’s 2025 revenues. Google Cloud revenues jumped 35.8% over 2025’s reported figure to $58.71 billion. The top line benefited from growth in GCP across core products, AI Infrastructure and generative AI (Gen AI) Solutions. Cloud backlog jumped 55% sequentially to $240 billion at the end of 2025. The AI push is expected to boost Google Cloud’s prospects in the near term.
Alphabet’s completion of the Wiz acquisition strengthens Google Cloud’s security capabilities and positions it more effectively to compete against Amazon’s and Microsoft’s respective cloud platforms. The Wiz acquisition will help Google Cloud offer end-to-end security across the cloud lifecycle. The combination of Google’s threat intelligence with Wiz’s real-time risk detection strengthens security portfolio capabilities. Integration of Wiz into Google Cloud boosts Alphabet’s enterprise clientele. Security push is expected to drive Google Cloud’s top-line growth further. Accelerating investments bodes well for GOOGL’s prospects. Alphabet expects capital expenditure between $175 billion and $185 billion for 2026.
GOOGL Stock: Buy, Sell, or Hold Ahead of Q1?
Alphabet’s dominant position in the Search market, thanks to AI infusion, is a strong growth driver. Expanding cloud footprint is noteworthy. However, a stretched valuation, rising costs and stiff competition in the cloud space make GOOGL shares risky for investors ahead of first-quarter 2026 results.
Alphabet currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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