Top 3 Highlights to Watch in Google’s Q4 Earnings

As Alphabet prepares to release its fourth-quarter earnings report, all eyes are on key areas of growth such as AI investments, cloud achievements, and a pivotal deal with Apple. Scheduled for Wednesday, this earnings call represents a crucial moment for investors.

Key Areas of Focus for Google’s Q4 Earnings

• AI Spending: Google’s financial chief, Anat Ashkenazi, hinted at significant capital expenditures for 2025.
• Cloud Business: The growth of new cloud customers surged by around 34% year-over-year in Q3.
• Apple Collaboration: The partnership with Apple regarding Google’s Gemini AI models for Siri presents numerous questions.

Capital Expenditure Expectations

In October, Google projected its capital expenditures for 2025 would be between $91 and $93 billion. Investors are eager to see if the company adheres to these targets. Furthermore, Ashkenazi expects a “significant” capital expenditure increase for 2026, with additional details anticipated during the earnings call.

Cloud Business Growth

Google’s cloud division is gaining momentum, competing vigorously against Amazon and Microsoft for essential AI deals. Bernstein analysts report an optimistic outlook, anticipating increased cloud business driven by AI sales, the notable Anthropic partnership, and growth of Google’s Tensor Processing Units (TPUs).

Partnership with Apple

This earnings release marks the first since Google and Apple announced a collaboration in which Apple will leverage Google’s Gemini AI models for its Siri assistant. Key aspects of this deal remain unclear, including the financial benefits for Google and if the company can utilize query data for training Gemini.

Analysts believe this partnership could have significant implications for Google, especially regarding how Apple utilizes Google’s data centers and TPUs. A clearer understanding of these elements is expected during the upcoming earnings call.

Advertising Insights

Investors are also concerned with Google’s core advertising business. Recent observations indicated that query volumes are rising, which is vital for Google’s revenue stream. Bernstein analysts noted that the growth in paid clicks was the highest since early 2021, suggesting a robust performance in search advertising.

As Alphabet approaches this earnings call, the outcome could influence investor confidence and set the stage for Google’s future endeavors in AI, cloud computing, and strategic partnerships.