The Latest on Google Parent Alphabet’s Earnings Report for Q1 2024

Key Takeaways

• Google parent Alphabet is set to report earnings for the first quarter of 2024 Thursday after the closing bell.
• Analysts expect Alphabet’s revenue and profit figures to show growth from the year-ago period but to have fallen from the previous quarter.
• The tech giant will report Google Cloud revenue, with investors watching for sustained growth.
• Google is expected to provide updates about its artificial intelligence (AI) initiatives after the company announced its in-house custom AI chip.

Google parent Alphabet (GOOGL) is gearing up to announce its first-quarter 2024 earnings report on Thursday after the closing bell. Analysts are eagerly awaiting this update, particularly focusing on the company’s cloud growth and any advancements in artificial intelligence (AI) initiatives.

According to estimates compiled by Visible Alpha, analysts project Alphabet’s revenue for the first quarter of 2024 to be $78.79 billion. While this figure is lower than the previous quarter, it marks an increase from $69.79 billion in the same period in 2023. Net income is expected to reach $18.89 billion, showing a decline from the fourth quarter but an improvement from $15.05 billion in the first quarter of 2023. Earnings per share (EPS) are projected at $1.51, compared to $1.17 in the same period a year earlier.

Key Metrics: Cloud Growth Momentum

Investors are particularly interested in observing sustained growth in Google Cloud following a significant revenue increase in the final quarter of 2023 after a period of minimal gains. Google Cloud revenue surged by over 25.5% year-over-year to $9.2 billion in Q4 2023, alleviating concerns about stagnation in this segment.

CFRA analysts anticipate that Google’s cloud revenue growth will continue at a pace of at least 25% throughout 2024. They also emphasize the importance of margins, noting that Alphabet has not been as aggressive in cost-cutting as other major tech companies.

Bank of America analysts predict that cloud revenue for the first quarter will reach $9.34 billion. They suggest that strength in this segment, coupled with higher quarter-over-quarter margins, could bode well for Alphabet’s overall performance.

Alphabet came close to achieving a $2 trillion market capitalization earlier this month during its Cloud Next conference, where it unveiled various projects and updates.

Business Spotlight: AI Updates

In addition to cloud growth, investors are keen on receiving updates about Alphabet’s AI initiatives amidst the ongoing AI boom within the tech industry. Alphabet recently announced the Google Axion Processor, a custom Arm-based chip tailored for data centers, emphasizing its commitment to AI development.

Major tech companies are investing in custom AI chips to manage costs and potentially reduce reliance on external providers like Nvidia. Microsoft, Amazon.com, and Meta Platforms have also introduced their own in-house AI chips.

CFRA analysts foresee additional opportunities for Alphabet through AI monetization across its various businesses. They believe that AI will drive long-term competitive risks but expect improvements in AI monetization for Google and its peers in 2024.

As of now, Alphabet shares have seen a modest gain of just over 10% in 2024, reaching $155.54 as of Friday afternoon.

Stay tuned for Alphabet’s earnings report to gain further insights into the company’s performance and strategic initiatives.

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