Alphabet, the parent company of Google, is set to release its second-quarter 2025 earnings after the market closes on Wednesday, July 23rd. Investors and analysts will be closely watching the results for insights into the company's performance across its key business segments, particularly advertising, cloud computing, and advancements in artificial intelligence (AI). The Zacks Consensus Estimate projects earnings of $2.13 per share for the second quarter, representing a year-over-year increase of 12.7%. Revenue is expected to reach $79.22 billion, an 11.02% increase from the same period last year.

Alphabet’s stock is relatively flat this year but has shown some momentum recently with the shares up nearly 8% this month. The stock is on a nine-session win streak and if it settles positive today, it will be the longest win streak on record for the shares. The stock is still 8% off of its all-time high from early February at $207 but the bullish momentum is building into the report. The Option Market is pricing in a one-day +/- 5% move in the shares, or about $9.40 either way.

Alphabet shares had been under pressure earlier this year on the back of tariff concerns but most of the focus was on losing its grip on search and advertising revenues. The increasing prominence of generative AI in search results could pose a potential challenge to traditional advertising models, and commentary on this trend will be closely watched. Google holds a dominant position in the global internet search market, controlling roughly 90% of the market share. While other search engines exist such as Microsoft’s (MSFT) Bing, Google's market share remains significantly higher than its competitors.

Google Cloud remains a significant growth driver for Alphabet. Analysts expect strong growth in the Cloud division, benefiting from robust enterprise demand and increasing AI momentum. Google Cloud has about a 12% share of the segment and is behind Amazon’s (AMZN) AWS (29%) and Microsoft’s (MSFT) Azure (22%). It’s growth rate in Cloud jumped 28% last quarter year over year and expectations are elevated for this to continue this quarter.

In AI, the company earmarked $75 billion for capital expenditures in 2025, well ahead of Wall Street's estimates. It also rolled out its latest AI model, Gemini 2.0, to the public, aiming to expand its reach and stay competitive with rivals. The tech giant embedded AI across major platforms, enhancing Search with features like AI Overviews and Circle to Search. Notably, AI Overviews alone attracted over 1.5 billion monthly users, reflecting growing user engagement.

YouTube is also leveraging AI to enhance content discovery and ad targeting, while Google Cloud is experiencing strong demand from enterprises for its AI-powered services and data analytics capabilities. YouTube’s leadership in video streaming continues to strengthen. With the expansion of ad formats and a growing subscription base, including over 125 million global users for YouTube Music and Premium, the platform is well-positioned for recurring revenue growth.

The death of search for Alphabet’s Google may be unwarranted at this point, but the fight is coming as threats from AI ramp up. Alphabet trades at a forward P/E of about 19 times, which is cheap compared to its Mag 7 competitors. It feels like traders are projecting the company to beat earnings expectations with the stock up nine days in a row. Advertising and cloud growth will most likely set the tone for the shares post earnings, so keep an eye on those metrics.

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