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Alphabet, the parent entity of Google and YouTube, is preparing to release its financial results for the first quarter, expected after market close on Thursday.
Analysts have provided the following projections:
Revenue: $89.12 billion, as reported by LSEG
Earnings per share: $2.01, per LSEG
YouTube advertising revenue: $8.97 billion, according to StreetAccount
Google Cloud revenue: $12.27 billion, based on StreetAccount data
Traffic acquisition costs (TAC): $13.66 billion, per StreetAccount
In the dynamic landscape of artificial intelligence (AI), Google is confronting significant challenges. Various factors, including increasing regulatory scrutiny and competition from emerging generative AI firms like OpenAI and Anthropic, could pose risks to the company’s established position. Additionally, there are concerns regarding the potential consequences of tariffs implemented during former President Donald Trump’s administration, as these may induce a reduction in advertising expenditure due to stricter budgetary constraints.
As of early 2025, Alphabet’s stock has seen a downturn of over 17%.
Expectations among Wall Street analysts indicate that Alphabet may achieve a 10% increase in revenue year-over-year for the first quarter, a period marked by significant AI innovations, a historic acquisition, cost management efforts, and regulatory challenges.
Recently, Google unveiled its latest AI models, Gemini 2.5 and Gemma 3, the former being touted as the company’s most advanced suite to date. This launch follows the earlier introduction of DeepSeek’s R1 model, which sparked a debate in Silicon Valley regarding cost-effectiveness in AI training.
Demis Hassabis, head of Google AI, reassured employees during a company-wide meeting in February that he remains confident in Google’s AI capabilities, downplaying fears about competition from DeepSeek. “Our strategy is robust, and we have all the components necessary to sustain our leadership this year,” he commented, while acknowledging that DeepSeek remains a competitor to watch closely.
This quarter also saw Google introduce enhanced personalization options for the Gemini platform, enabling the chatbot to utilize user search histories and integrate with other Google applications like Calendar, Notes, Tasks, and Photos.
Additionally, Nvidia’s CEO, Jensen Huang, announced a collaboration with Google’s Gemini products, commending the company’s technological prowess. “No company excels across every layer of computing like Google and Google Cloud,” Huang stated.
Alphabet has also made strides in the autonomous vehicle sector. In March, Waymo began offering robotaxi services in Austin, Texas, through the Uber app and initiated a waitlist in Atlanta, as part of broader expansion plans across the U.S. in the upcoming year.
Another significant development occurred when Alphabet announced its largest acquisition to date—a $32 billion cash deal for Wiz, exceeding the nearly $10 billion offer made in 2024. This acquisition aims to enhance Google’s cloud security capabilities, particularly as the company seeks to increase its market share compared to Amazon and Microsoft, which may bolster its case for obtaining regulatory approval.
However, Google’s quarter was not without its legal and regulatory hurdles.
A recent federal court ruling determined Google was maintaining illegal monopolies in online advertising, which marks the second major antitrust setback for the tech giant after a judge previously concluded it had monopolized internet search. In April, Google reached an agreement with its employee union to overturn a policy that prohibited staff from discussing antitrust legal matters, a significant win for employees ahead of the upcoming remedy trial linked to the search monopoly case.
Meanwhile, the education technology firm Chegg has filed a lawsuit against Google, alleging that the company’s “AI summaries” feature negatively impacted its website traffic and revenue. Similarly, Reddit has reported fluctuations in user growth attributed to Google’s search algorithm, although CEO Steve Huffman noted a recovery in traffic since these initial issues.
WATCH: DOJ targets Google’s AI ambitions in high-stakes antitrust trial
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