Alphabet’s GOOGL fourth-quarter 2024 results, scheduled to be released on Feb. 4, are likely to benefit from its expanded cloud service offerings.
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Alphabet’s cloud services arm — Google Cloud — has become the key catalyst driving its top-line growth.
Alphabet’s cloud offerings include Google Cloud Platform and Google Workspace, which have been gaining momentum in the booming cloud computing market. Google’s growing investments in infrastructure, security, data management, analytics and generative AI (Gen AI) have been major growth drivers.
Alphabet Inc. revenue-ttm | Alphabet Inc. Quote
The Google Cloud segment, which derives revenues from fees collected for Google Cloud Platform services and Google Workspace collaboration tools, has been a major top-line growth driver for Alphabet.
In the third quarter of 2024, Google Cloud revenues soared 28.8% year over year to $11.35 billion, accounting for 12.9% of the quarter’s total revenues.
For the fourth quarter of 2024, the Zacks Consensus Estimate for Google Cloud revenues is pegged at $12.14 billion, suggesting growth of 32.1% from the year-ago quarter’s reported figure.
Click here to know how Alphabet’s overall fourth-quarter 2024 results are likely to be.
GOOGL’s strong cloud services portfolio and expanding network of data centers, availability zones and regions are likely to have contributed well to Google Cloud revenues.
Robust real-time data, analytics and AI, along with its open and scalable cloud infrastructure, are expected to have helped win customers in the to-be-reported quarter.
Its deepening focus on Gen AI is anticipated to have been a major positive. Solid momentum in Gemini is expected to have benefited Google Cloud’s fourth-quarter performance.
The growing momentum with the Vertex AI platform is likely to have contributed well.
Google’s introduction of various open-source tools to support Gen AI projects and infrastructure has been a plus. The solid adoption of Gen AI-powered Workspace tools is likely to have driven strong top-line growth. The strong capabilities of Google Cloud to identify cyber threats and automate security workflows and responses on the back of generative AI are likely to get reflected in the upcoming results.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.
Alphabet currently has an Earnings ESP of +5.96% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.