Alphabet (GOOGL), the parent company of Google, is scheduled to report first quarter 2025 results after the market close on Thursday, April 24, with a conference call scheduled for 4:30 pm Eastern Time. What to watch for:
EXPECTATIONS: Current consensus EPS and revenue forecasts for Alphabet’s March-end quarter stand at $2.01 and $89.15B, respectively, according to data provided by LSEG Data and Analytics. That $2.01 EPS estimate for the first quarter is down 2c over the past 90 days ago, according to LSEG Data.
Over that same time frame, analysts have roundly been lowering their Alphabet price targets.
On March 27, Guggenheim lowered the firm’s price target on Alphabet to $190 from $215 and kept a Buy rating on the shares. The firm updated its Alphabet model ahead of Q1 earnings to reflect modest incremental softness in the brand advertising environment and to provide more detail on its YouTube subscription estimate, noted the analyst, who said the firm’s advertiser checks indicated slower brand ad demand in March with the trend likely to continue into Q2.
A few days later, Jefferies lowered the firm’s price target on Alphabet to $200 from $235 and kept a Buy rating on the shares. The firm lowered price targets across its U.S. software coverage to account for multiple compression amid early signs of softening macro factors impacting deal decisions across tech. The firm now believes “we may have another ‘mullet’ year in software” with first half chop followed by second half flow, the analyst told investors. While not lowering estimates “yet” as the firm noted that recent guidance levels were set for no material improvement, the firm added that ongoing uncertainty meant “investors are waiting on the sidelines to assess the impact.”
More recently, Piper Sandler lowered the firm’s price target on Alphabet to $185 from $208 and kept an Overweight rating on the shares. Alphabet may be “a port in the storm in digital ads” given its scale, but recent share data has not been positive and the firm’s ad buyer had a mixed report, Piper said. For Q1, the firm is looking for $88.2B in revenue and Piper lowered its 2025 and 2026 revenue estimates 1% and 2%, respectively.
Meanwhile, Citi lowered the firm’s price target on Alphabet to $195 from $229 and kept a Buy rating on the shares. After spending time at Google Cloud Next, the firm came away “incrementally positive” on the Google Cloud Platform given continued progress across its artificial intelligence tools, Agent offerings, and infrastructure upgrades. However, Citi cut the price target to reflect more limited visibility across the broader online advertising landscape, due in part to tariffs. Still, the firm continues to believe Google’s “product halo and newer search experience with AI Mode can drive search usage and relatively consistent revenue growth.”
Among analysts tracked by Bloomberg that have updated their views on Alphabet within the last twelve months, 60 have Buy or equivalent ratings, 15 have Hold or equivalent ratings and the average twelve month price target of 56 of those analysts is $202.96.
AI LEADERSHIP: On February 4, Sundar Pichai, CEO of Alphabet and Google, called Q4 “a strong quarter” driven by “leadership in AI and momentum across the business.”
Pichai added: “We are building, testing, and launching products and models faster than ever, and making significant progress in compute and driving efficiencies. In Search, advances like AI Overviews and Circle to Search are increasing user engagement. Our AI-powered Google Cloud portfolio is seeing stronger customer demand, and YouTube continues to be the leader in streaming watchtime and podcasts. Together, Cloud and YouTube exited 2024 at an annual revenue run rate of $110 billion. Our results show the power of our differentiated full-stack approach to AI innovation and the continued strength of our core businesses. We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025.”
Earlier this month, BofA noted that Google was hosting its Cloud Next conference from April 9-11 and said it saw the opening keynote from Google Cloud CEO Thomas Kurian on Day 1 being the “top event for updates on Google’s cloud and AI strategy.” The firm, which said at the time that it thought the event could “potentially boost AI sentiment on the stock,” kept a Buy rating and $225 price target on shares of Google parent Alphabet.
ANTITRUST FIGHTS: In August of last year, a federal judge ruled Google’s payments to make its search engine the default on smartphone web browsers violates U.S. antitrust law.
Earlier this week, Nick Turley, the CEO of OpenAI’s ChatGPT, said the company would be interested in buying Google’s Chrome browser if a federal court orders it to be spun off, Bloomberg reported. Turley testified that having Chrome more deeply integrated into Microsoft-backed OpenAI would allow for a better product and a more seamless user experience. The Justice Department is looking to force Google to divest Chrome, among other remedies, to prevent the company from monopolizing the online search market.
Meanwhile, a Google executive testified during the same trial that while ChatGPT has drawn some search queries, it hasn’t yet cannibalized lucrative commercial searches, though Google anticipates this will eventually change, according to The Information.
In a separate antitrust action against Google brought by the federal government and seventeen states as plaintiffs, they claim that Google has monopolized three digital advertising technology markets in violation of Section 2 of the Sherman Act, and has tied its products in these markets together in violation of Sections 1 and 2 of the Sherman Act. In a ruling posted to the site of the United States District Court for the Eastern District of Virginia on April 17, Judge Leonie Brinkema wrote: “With the benefit of a three-week bench trial and extensive post-trial filings, the Court finds that Plaintiffs have failed to prove that there is a relevant market for open-web display advertiser ad networks, but have proven that Google has violated Section 2 of the Sherman Act by willfully acquiring and maintaining monopoly power in the open-web display publisher ad server market and the open-web display ad exchange market, and has unlawfully tied its publisher ad server and ad exchange in violation of Sections 1 and 2 of the Sherman Act. Having found Google liable, the Court will set a briefing schedule and hearing date to determine the appropriate remedies for these antitrust violations.”
Afterward, Citi said this ruling focuses primarily on Google’s advertising network, which Citi projects accounts for 8% of 2025 gross revenue, but is declining, and contributes 1% to overall company EBITDA. Citi believes that while it is likely to take some time for any proposed remedies to be ruled upon and the appeals process to be completed, it wouldn’t be surprised to see Google ultimately spin off its ad network as a result. Google’s core search and owned and operated ads business would not be as impacted from a spin or divestment, the firm added.
Meanwhile, Craig-Hallum also commented on the federal judge having ruled against Google, citing monopolistic behavior in its adtech business, noting that behavior between Google exchange and ad server was the primary culprit of these behaviors, with remediation focused on a divestiture of some combination of GAM and AdX. The firm sees clear benefits to supply side platforms as Google’s behaviors have artificially suppressed win-rates, which should see an immediate boost as Google’s anti-competitive behaviors are remediated. The biggest opportunity resides with Magnite (MGNI), the number 2 SSP, which has flourished despite Google’s monopolistic practices, Craig-Hallum argued. Overall, the firm views this as a win for the broader open web and publishers.
BofA noted that the judge concluded that Google maintained monopolies in both the publisher ad server and advertiser ad network markets, but also found that the DOJ failed to show that Google’s advertiser tools or acquisitions of DoubleClick and AdMeld were anti-competitive. The ruling may raise the possibility of behavioral or structural remedies, but the firm thinks the potential financial impact for Alphabet’s bottom-line may be “modest” given that the segment at risk, Google Network, had revenue of $30B in 2024, or under 9% of Google’s gross revenues and just 3% of net revenues. In addition, any final remedy would likely be stayed during the appeal, which could take 18 months, possibly pushing any enforcement into 2027 or later, the analyst added. The firm maintains a Buy rating and $185 price target on Alphabet shares.
WIZ DEAL: On March 18, Google announced it signed a definitive agreement to acquire Wiz, a cloud security platform headquartered in New York, for $32B, subject to closing adjustments, in an all-cash transaction. Once closed, Wiz will join Google Cloud. “This acquisition represents an investment by Google Cloud to accelerate two large and growing trends in the AI era: improved cloud security and the ability to use multiple clouds,” the company stated.
After Alphabet announced an agreement to buy cloud security provider Wiz for $32B in cash, Jefferies said a deal of this size “emphasizes the mission criticality of Cyber” and should support valuations broadly. However, in the near-term, it could pressure cloud vendors such as Palo Alto Networks (PANW), SentinelOne (S) and CrowdStrike (CRWD) as Google uses its scale to push pricing and penetrate the market. Long-term, this should benefit pure play vendors as “the Switzerland effect is appreciated by customers who may not trust” Google to guard Amazon’s (AMZN) AWS and Microsoft’s (MSFT) Azure, the analyst added. The firm also noted that it foresaw no changes to Check Point’s (CHKP) partnership with Wiz.
The Wiz acquisition will enhance Google’s existing cybersecurity offerings, Threat Intelligence, Security Operations, Security Command Center, Mandiant Consulting Services, and enable organizations to operate more safely and efficiently in multi-cloud environments, JPMorgan stated. Importantly, the firm believes the Wiz acquisition will further strengthen Google’s multi-cloud value proposition and deepen its enterprise relationships as Wiz is used by over 50% of Fortune 100 companies. JPMorgan expects the deal to have broader implications for large-cap Internet as it will be among the first to test the current administration’s tolerance for large scale M&A. It also does not expect any change to Google’s approach around capital returns. The firm has an Overweight rating on Alphabet.
CHROME KEEPING COOKIES: On April 22, Anthony Chavez, VP, Privacy Sandbox, stated in a Google blog post: “The goal of the Privacy Sandbox initiative is to develop new ways to strengthen online privacy while ensuring a sustainable, ad-supported internet, (but) a lot has changed since we announced the Privacy Sandbox initiative in 2019 and entered into a formal engagement with the CMA and ICO in 2022. For example, the adoption of privacy-enhancing technologies has accelerated, new opportunities to safeguard and secure people’s browsing experiences with AI have emerged, and the regulatory landscape around the world has evolved considerably. Taking all of these factors into consideration, we’ve made the decision to maintain our current approach to offering users third-party cookie choice in Chrome, and will not be rolling out a new standalone prompt for third-party cookies. Users can continue to choose the best option for themselves in Chrome’s Privacy and Security Settings. We’ll continue to enhance tracking protections in Chrome’s Incognito mode, which already blocks third-party cookies by default. This includes IP Protection, which we plan to launch in Q3 2025. And we’ll continue to invest in making Chrome the world’s most trusted browser, with technologies like Safe Browsing, Safety Check, built-in password protections, AI-powered security protections, and more.” Publicly traded companies in marketing technology include Trade Desk (TTD), Criteo (CRTO), Magnite and LiveRamp (RAMP).
SENTIMENT: Check out recent Media Buzz Sentiment on Alphabet as measured by TipRanks.
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