Alphabet (GOOGL) is scheduled to report earnings postmarket today, giving us another look into the Mag 7’s performance. Microsoft (MSFT) took a nosedive after its earnings, signaling that the market is ready to punish these high-flying hyperscalers unless they deliver the goods.

The company is vast, ranging from its ad duopoly with Meta Platforms (META) to YouTube, which is rapidly gobbling up screentime vs streaming competitors, to its self-driving Waymo arm, to its Gemini AI system that’s pulled ahead of OpenAI. Zacks anticipates EPS of $2.58, a 20% gain over last year, and revenue of $94.7 billion, +16% vs last year.

Investors are still primarily focused on AI. Search and advertising are Google’s primary revenue drivers, and both have been impacted by the integration of AI tools in ways that may subtly, substantially reshape their business.

As analysts have pointed out, Google gets paid by clicks into other websites from its search bar, acting as a broker of information. Having an AI summary of a user’s question may negate the need for them to click into the very websites Google is pulling the information from – in some ways, a lose-lose situation for web traffic.

On the other hand, AI has been touted as a tool for personalized advertising. This could lead to Google doubling down on shopping, changing the nature of Search. As smaller, non-retail websites are potentially starved for traffic, it could cause a shift in the Internet and the information on it – which, in turn, is what AI references and is trained on. The Internet is an ecosystem, and AI is a seismic event: the shakeout will continue for years.

Google has a lot of irons in the fire and continues to compete well in diverse categories. Investors will have plenty to focus on in the report. Investors should watch capex spending on AI, and consider the potential pros and cons of how it is disrupting their core businesses.

Its cloud business growth continues to outpace competitors on a quarterly basis, beating Amazon’s AWS (AMZN) and Microsoft’s Azure (MSFT). The consensus mark for fourth-quarter 2025 Google Cloud revenues is pegged at $16.25 billion, indicating 35.9% growth over the figure reported in the year-ago quarter.

The options market is currently implying a post-earnings move of +/- $19, or around 6%. The stock is up almost 70% vs last year and made a new all-time high of $349 yesterday. Tune into the Schwab Network for live earnings breakdowns and more!

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