Live: Alphabet (GOOGL) Up 2% Before Earnings – Will Shares Soar After Hours?

Alphabet (Nasdaq: GOOGL) stands alone among the Magnificent 7 companies tonight.

• Microsoft: Is down 4% after-hours. As we’ve detailed in our live blog on the company, the biggest reason for their drop is guidance which was inline and disappointed Wall Street.
• Meta Platforms: Is down more than 7%. The company topped revenue expectations, but guidance was middling and the company forecasts large operating expense growth next year.
• And only Alphabet is gaining after-hours. Shares of Alphabet are up 6.7% as of 8 p.m. ET.

What went right for the company?

• EPS of $2.87 absolutely smoked expectations of $2.26.
• Revenue of $102.3 billion broke the nine-figure barrier for the first time.

And the company’s conference call was full of optimistic quotes. Let’s dive into three storylines every Alphabet investor needs to be following closely.

AI Overviews Are Driving Search Growth – That’s Great News for Alphabet Investors

Here’s what Sundar Pichai had to say about AI Overviews on the company’s conference call:

“As we have shared before, AI Overviews drive meaningful query growth. This effect was even stronger in Q3 as users continue to learn that Google can answer more of their questions, and it’s particularly encouraging to see the effect was more pronounced with younger people. We’re also seeing that AI Mode is resonating well with users. In the U.S., we have seen strong and consistent week-over-week growth in usage since launch and queries doubled over the quarter.”

Pichai made sure to emphasize the growth among younger audiences. One of the ‘bear’ arguments levied at Alphabet is that they’re losing younger cohorts to ChatGPT. With AI overviews providing extremely fast and reliable answers, Google may have successfully blunted that threat.

2026 Is the Year Waymo Goes Global

Here’s Pichai on Waymo:

“And finally, Waymo, next year Waymo aims to open service in London, and they are working to bring service to Tokyo. They’ve also announced expansions to Dallas, Nashville, Denver and Seattle and secured permission to operate fully autonomously at San Jose and San Francisco Airports. Autonomous testing continues to scale in New York City.

The new Waymo for Business allows enterprises to offer Waymo as a work travel option. And we launched Waymo teens accounts in Phoenix this summer. We are pleased to see usage steadily increase with positive feedback from teens and their parents alike. Waymo’s growth and momentum are strong, and 2026 is shaping up to be an exciting year.”

As most investors are aware, Waymo’s approach to self-driving is in direct competition to Tesla, which is aiming to turn its fleet of cars into robotaxis that are far more cost-effective.

With Tesla trying to scale, there’s a risk Waymo could expand too slowly and get left behind. It looks like Alphabet is going to invest heavily to win this race and is aiming for 2026 to be the year Waymo truly goes global.

Massive Deals Will Boost Google Cloud’s Business

Finally, on the last question of the conference call, Pichai dropped this interesting fact:

“On cloud, I would point out as a sign of the momentum, I think the number of deals greater than $1 billion that we signed in the first 3 quarters of this year are greater than the 2 years prior. So we are definitely seeing strong momentum, and we are executing at pace.

And in terms of long-term economics, I would say that, again, us being a full stack AI player and the fact that we are developing highly differentiated products on our own technology, I think, will help us drive a good trajectory here as you have seen over the past few years.”

With Google having invested early in TPUs, its Cloud becomes an ideal customer for companies that need dramatic scale. It appears the number of ‘whales’ Google Cloud is signing has been rising at a torrid pace this year.

Alphabet’s call just started, we embedded a link to their YouTube if you’d like to watch live.

We’ve embedded it below if you’d like to watch it.

• Microsoft: Down 2.1%
• Alphabet: Up 5.7%
• Meta: Down 9%
• ServiceNow: Up 4.7%

Shares of Alphabet are now up about 5.6% after-hours, slightly below their highs after the company announced earnings.

Some figures from the quarter worth paying attention to:

• YouTube ads hit $10.3 billion, a jump from $9.8 billion last quarter
• Search grew to $56.2 billion from $54.2 billion last quarter
• Cloud grew at the fastest rate, hitting $15.2 billion in revenue amid a continuing situation of demand exceeding supply.

One note – Cloud EBIT hit 23.7%, which is up from 17.1% last year. The segment isn’t only growing fast, but its profitability is increasing.

Sundar Pichai said, “Alphabet had a terrific quarter, with double-digit growth across every major part of our business. We delivered our first-ever $100 billion quarter,” highlighting broad-based momentum.

His remarks were very bullish, as he pointed to continued AI rollouts and strong demand in Search, YouTube ads and Cloud services.

In Q3 2023, operating income climbed 24.56% year-over-year to $21.34 billion, while net income surged 41.55% to $19.69 billion. The outsized net income gain versus operating income growth points to stronger operating leverage and margin expansion.

Google now expects capital expenditures to be $91 to $93 billion this year. That’s up from their prior guidance of $85 billion.

That’s another win for AI infrastructure stocks.

GOOG | Alphabet Inc. Q3’25 Earnings Highlights:

• Adj. EPS: $2.87 [✅]; [UP] +35% YoY
• Revenue: $102.3B [✅]; [UP] +16% YoY
• Adj. Gross Margin: 30.5% [⚠️]; [DOWN] -50 bps YoY
• Net Income: $34.98B [✅]; [UP] +33% YoY
• Operating Income: $31.23B [✅]; [UP] +9% YoY
• Operating Margin: 30.5% [⚠️]; [DOWN] -50 bps YoY
• Free Cash Flow: $24.46B; [UP] +20% YoY
• Capital Expenditures Outlook: $91B to $93B [➖]

Outlook:

• • Expectations are driven by strong demand in Google Cloud and continued growth in advertising revenues.
  • Investment in AI and cloud infrastructure is anticipated to support future growth.

Q3 Segment Performance:

• Google Services Revenue: $87.05B [✅]; [UP] +14% YoY
• Google Cloud Revenue: $15.16B [✅]; [UP] +34% YoY
• Other Bets Revenue: $0.34B [❌]; [DOWN] -11% YoY

Other Key Q3 Metrics:

• Adj. Operating Income: $34.69B [✅]; [UP] +22% YoY
• Adj. Operating Expenses: $71.12B [✅]; [UP] +19% YoY
• R&D Expenses: $15.15B ) [✅]; [UP] +21% YoY
• Effective Tax Rate: 20.5% (vs. 19.5% YoY)
• Number of Employees: 190,167 [✅]; [UP] +5% YoY

CEO Commentary:

• Sundar Pichai: “Alphabet had a terrific quarter, with double-digit growth across every major part of our business. We delivered our first-ever $100 billion quarter. Our full stack approach to AI is delivering strong momentum and we’re shipping at speed, including the global rollout of AI Overviews and AI Mode in Search in record time. In addition to topping leaderboards, our first party models, like Gemini, now process 7 billion tokens per minute, via direct API use by our customers. The Gemini App now has over 650 million monthly active users. We continue to drive strong growth in new businesses. Google Cloud accelerated, ending the quarter with $155 billion in backlog. And we have over 300 million paid subscriptions led by Google One and YouTube Premium.”

CFO Commentary:

• Ruth Porat: “We are investing to meet customer demand and capitalize on the growing opportunities across the company.”

Other Executives:

• Thomas Kurian, CEO of Google Cloud: “The growth in Google Cloud is a testament to our commitment to providing the best infrastructure and services for our enterprise customers.”

Microsoft’s EPS of $4.13 soundly tops Wall Street estimates of $3.66. Revenue of $77.7 billion i salso a big beat versus expectations off $75.3 billion.

EPS of $2.87 versus expectations of $2.26… That’s why shares are leaping right after the release.

Alphabet earnigns just crossed the newswire and shares are immediately up 6%… More analysis to come… 

Here we go, it’s almost time for Alphabet’s earnings.

As a reminder, simply leave this page open, and new updates will begin posting as soon as earnings hit the newswires. We expect the stock to begin moving slightly after 4:05 pm. ET. 

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Shares of other Magnificent 7 companies like Microsoft and Meta are down today, but Alphabet shares have been gaining throughout the day.

Alphabet is up 2.5% as of 3:40 p.m. ET.

What’s driving the gains? One piece of optimism is news that the company’s TPUs (even the oldest ones that are 7 years old) are still oversubscribed. Alphabet just signed a deal with Anthropic to use their TPUs, and there are reports of other major companies lining up to get on Google Cloud. The TPU is quickly becoming one of Alphabet’s strongest assets, which is music to the ears of investors in the company and investors in Broadcom (Nasdaq: AVGO).

Popular prediction market Polymarket currently has a 78% chance that Alphabet beats earnings this quarter (listed at EPS of $2.29).

That’s below the odds of fellow Magnificent 7 giants Meta and Microsoft, which both have odds of beating earnings tonight at over 90%.

Why are Alphabet’s odds lower? One reason might be that Alphabet has had more ‘close calls’ recently. In February, the company posted earnings of $2.15, which was only slightly above estimates of $2.12.

Still, the safe money is on the fact Alphabet will beat earnings tonight. However, that doesn’t assure the stock will be up after hours. Wall Street will be closing watching forward commentary from Alphabet, what the company has to say about Search and how it’s withstanding threats from rivals like ChatGPT, and growth in Alphabet’s Google Cloud division.

How Alphabet addresses each of those areas will impact where shares head after hours.

Average 7-Day Post-Earnings Change: +4.1%