GOOG trades at $157.72 after a subdued performance at the 2024 lows. The earnings could be a catalyst for a stronger rebound,
Alphabet will report its first-quarter earnings after the bell on Thursday as Wall Street absorbs the first round of profit announcements since the tariffs on global trade partners of the US.
Analysts don’t expect tariffs to hurt Q1 revenue or earnings per share for Google, but investors will be on the lookout for forward guidance indicating a potential hit for the second half of the year.
“We have seen some transaction velocity in e-commerce drop off of late, and given the macro noise, would expect digital ads to weaken in 2Q,” said Barclays analyst Ross Sandler in an April 8 investor report.
Alphabet shares have lost more than 19% year to date, but tariffs aren’t the only concern as Wells Fargo analyst Ken Gawrelski wrote recently that agencies are reevaluating their ad search strategies for the first time as more users begin to use generative AI agents.
Alphabet could also be hit by secondary impacts from reduced spending on digital ads if businesses feel the sting of tariffs, alongside consumer strain.
Analysts expect Google to deliver earnings per share of $2.01 on revenue of $89.1 billion, according to Bloomberg estimates. Google’s advertising revenue is anticipated to come in at $66.4 billion, with YouTube ads hitting $8.9 billion.
“Google’s income statement is not ideal,” said Morningstar analyst Malik Ahmed Khan, who noted that investors don’t get to see a detailed income statement for YouTube. The platform’s ad revenue is delivered as a one line item, while subscription revenue is bundled with other segments of the business.
The earnings will need to deliver something good in order to secure a price low at current levels.
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