Alphabet (GOOGL) Earnings Preview - New All-Time Highs Ahead?

• Alphabet (GOOGL) is set to report quarterly earnings on Wednesday, February 4th, after the market closes
• The tech giant is expected to report an earnings-per-share of $2.64 on $111 billion in revenue
• Last quarter, Alphabet reached $100 billion in a quarter for the first time
• Investors are looking for more positive AI news, with an EPS & revenue beat

Google Earnings Preview - AI Focus Bears Fruit

While other companies are having trouble staying afloat in 2026, GOOGL continues to rip to new all-time highs. With a stock price of $345, GOOGL is already up 10% on the year and we're one month in. Alphabet will look to push this momentum forward with an earnings call in a few days, where they're expected to report an earnings-per-share (EPS) of $2.64 on $111 billion in revenue. The revenue figure is a 10% increase from the last earnings quarter's expectation, where they reached $100+ billion in revenue for the first time. During the tariff lows of April 2025, GOOGL hit a floor price of $140 and is now up a whopping 146% from that price. It's also interesting to see such a decoupling from a generally high positive correlation in Microsoft. When you chart the companies in an overlay, the divergence in price is staggering:

In the previous earnings call, Sundar Pichai, CEO of Alphabet & Google, had strong words of positivity:

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

Implied Volatility of GOOGL Ahead of Earnings

With such strong growth in the company, it can be hard to envision how the stock price can surge much higher. Understanding the implied volatility landscape is step one in removing emotion and assumptions from the binary event - implied volatility helps us put context around this week's expected move, and we can weigh that expected move against further-dated cycles to see how much weight the market is putting on Alphabet's earnings call:

Looking at this week's expiration, we can see a +-$19.00 implied stock price move. With the stock price at $345, this accounts for a 5.5% implied stock price range. With most earnings reports falling between 5-10% of the notional value of the stock price, this puts Alphabet's announcement on the lower end of implied volatility. With that said, the April 2026 implied stock price range is +-$40.29. This tells us that even though the earnings implied volatility is low, it makes up for about half of the implied stock price range that's projected over the next 74 days. There is still plenty of stock price movement priced into this earnings announcement in that context.

Bullish on GOOGL Earnings

If you're bullish on GOOGL stock for earnings, you want to see an EPS & revenue beat. If either of these figures are missed, I find it hard to believe the stock price would rally considering it's at all-time highs right now. A positive outlook for AI would be great as well.

Bearish on GOOGL Earnings

If you're bearish on GOOGL for earnings, you want to see a slowdown in projections for the rest of the year, and an EPS or revenue miss. Especially with the upside divergence in GOOGL stock against other Magnificent 7 stocks, if Alphabet misses a beat on the earnings call we could see a selloff in GOOGL and a rally in other companies that have yet to find a bid this year.

Regardless of whether you're bullish, bearish, or even neutral, tune in to Options Trading Concepts Live on Wednesday at 11am CST for a full overview of earnings strategies with options.

Mike Butler, tastylive director of market intelligence, has been trading the markets for a decade. He appears on Options Trading Concepts Live, Monday-Friday. @tradermikeyb

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