Alphabet Earnings Preview — Will AI Search Affect the Bottom Line?

AI search results are going to be a major talking point over the next few quarters

• Alphabet (GOOGL) will report quarterly earnings on Wednesday after the market closes.
• The company is expected to announce earnings-per-share of $2.14 on $79.19 billion in revenue.
• The stock has recovered from lows, but turbulence still remains as uncertainty looms

Alphabet (GOOGL) is set to announce quarterly earnings after the market closes on Wednesday, and investors expect decent numbers for the quarter. The company is expected to report earnings-per-share (EPS) of $2.14 on $79.19 billion in revenue. Both of these figures are over 10% higher than last year's results. While earnings are expected to come in strong, the threat of AI and how people are searching the internet these days could be cause for concern for short-term traders and long-term investors alike. Can the company withstand and adapt to the rise in AI searches?

GOOGL stock has had a turbulent 2025, currently sitting around $190 per share after crashing to a low of $140.53 from the high of $207.05. We've seen a strong rebound from the tariff frenzy lows, and the stock now sits right where it opened the trading year.

Still, there are questions to be answered as many internet users now look to AI solutions for common and complex questions. Perhaps users are more prone to use an AI solution simply because they can create images, tables, code on your behalf, and much more. Long gone are the days of simple search results and search engine optimization. Now, AI results are starting to take off and many companies are shifting their focus to show up in AI search results compared to classic links.

Sundar Pichai, Alphabet CEO, offered positive words after a strong Q1 earnings call: “We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI. This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation. Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5 billion users per month. Driven by YouTube and Google One, we surpassed 270 million paid subscriptions. And Cloud grew rapidly with significant demand for our solutions."

Clearly, Google is still a behemoth and it will take a lot to lose a large chunk of market share. Google search results do feature AI Overviews first now, which gives Google an AI feel with simple search queries. Still, it's not comparable to the ability of other AI offerings, and we'll have to see if there is commentary on the topic on Wednesday.

Opinions aside, we can always look at the implied volatility of the options market to determine market sentiment ahead of the earnings call/. As it stands, we're seeing a +- $10 expected stock price range for the earnings call this week. This is about 5% of the notional value of the stock price, which puts Google earnings on the lower end of the range for tech earnings this quarter.

With that said, we're still only seeing an expected stock price range of +/- $20 for October's option cycle, which is 88 days away. In other words, this week's implied volatility for the earnings call accounts for half of the implied volatility for the next few months. Implied volatility may be low, but it's certainly concentrated around this earnings call.

Bullish on Alphabet stock for earnings

If you're bullish on Alphbet stock for earnings, you're looking for a strong earnings report from an EPS and revenue perspective. You're also looking for executives to front-run AI concerns with a solid plan to integrate more AI-centric results and features into the main google search interface. The fact that the general market is calm helps quell the fears of investors, but Google really needs to post strong numbers if we're expecting for the rally to continue.

Bearish on Alphabet stock for earnings

If you're bearish on Alphabet stock for earnings, you're looking for a miss in the EPS and revenue departments. You're also looking for a slowdown in growth or sentiment from executives, and more turbulence on the lawsuit front. It seems the company is in the headlines for the wrong reasons these days, and any new report or update from current investigations could send investors fleeing, given the positives we're seeing for many other tech stocks.

Tune in to Options Trading Concepts Live at 11 a.m. CDT on Wednesday ahead of GOOGL earnings for some in-depth options trading strategy ideas.



Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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