Google Stock: What To Expect From Alphabet’s Earnings Call on April 29

All eyes are on Google’s parent company Alphabet, as the search giant will publish its earnings call on April 29, which will dictate GOOG stock’s next direction in the charts. Expectations are high as traders gave ample room for the search giant to spend on building its AI infrastructure. Moreover, the tech titan’s capital expenditure for its AI services currently stands at $175 billion to $185 billion. However, institutional funds have been buying GOOG ahead of the earnings call and increasing their positions.

Google Stock: 2 Things To Consider Before the Earnings Call

AI Capex Vs Returns on Investment (ROI)

That’s a lot of money being spent by the company, and it has yet to see any formal returns. Investors are no longer impressed by the scale of the infrastructure; they want to see return on invested capital (ROIC). If the earnings call shows that profits are dwindling, Google stock could experience a downturn. Alphabet now stands at the crosshairs of a major turn that can make or break its AI ambitions. Also, massive investments must not lead to depreciation costs and compressed margins.

Also Read: New Price Target For Google’s Alphabet Stock is $405, 23% Profit

The Robust Cloud Growth To Be a Savior

Cloud computing from Google could be a saving grace, as the enterprise is expected to grow by 50% year-on-year. The confidence in the platform comes after the company recorded substantial profits in Q4. Its operating income surged 154% to $5.3 billion on $17.7 billion in revenue. It is also expected to continue the growth as the demand for high-performing AI interfaces is robust. Moreover, the cloud computing segment could save Google’s stock from plummeting in the indices. While the market expectations are that of a 50% growth, the earnings call will reveal the reality.

Below are the consensus estimates from Wall Street on Alphabet’s earnings call.