All Eyes on Alphabet Stock Ahead of Earnings; Here’s What Brent Thill Expects

Alphabet (NASDAQ:GOOGL) hasn’t been immune to the market’s turbulence this year. The stock is down 20%, as the tech titan, like many of its peers, has been absorbing the impact of Trump’s ever-changing tariff policies.

All eyes now turn to this Thursday (April 24), when the company is set to report Q1 results. Jefferies analyst Brent Thill thinks a solid quarter is about to play out, but it will be one overshadowed by the macro/tariffs backdrop, which “cast a haze over Q2-Q3.”

According to ad channel checks, Q1 came in “in line with target,” but the outlook further down the road is murkier. Advertising, which still drives about 75% of Alphabet’s revenue, is under pressure, particularly as Chinese advertisers pull back. Thill has trimmed his Q2 gross revenue estimate by 3% to $91.7 billion (versus the Street’s $93.7 billion), and lowered his FY25 forecast to $382 billion, just shy of consensus.

Although Q2 budgets are already set, Thill warns that ad spending in the back half of 2025 could be tighter, citing – you guessed it – tariffs. For 2025, the analyst expects low- to mid-single-digit growth due to tougher comps from the elections and Olympics. Still, as advertisers continue to prioritize scaled platforms, Thill thinks ad revenue should show some resilience.

“More visibility may come in the next month as advertisers announce budget plans at the TV Upfront event,” the analyst explained.

But while the outlook leaves plenty to be desired, Thill notes several reasons why GOOGL’s value proposition remains enticing. While softer ad spending could pressure near-term margins, Google’s “fundamentals remain resilient.” Additionally, industry checks highlight YouTube’s unique multi-channel position it to “capture a broader reach.” Meanwhile, Google Cloud is well placed to capitalize on Gemini AI advancements, with management reaffirming its $75 billion Capex commitment for cloud and AI infrastructure this year. Thill also expects the $32 billion acquisition of Wiz (its biggest ever) to enhance GCP’s market footprint. Lastly, Q1 EBIT margins are likely to hold steady, in line with Street estimates of 38.1%, supported by continued cost discipline despite macro volatility.

As for valuation, GOOGL stock is trading at just 10x NTM EV/EBITDA, an 18% discount to its 10-year average of 12.2x and not far from its historical low of 8.9x.

Given the setup, Thill rates GOOGL shares a Buy while his $200 price target factors in a one-year gain of 32%. (To watch Thill’s track record, click here)

He’s not alone – 26 other analysts are also bullish on Alphabet stock. With an additional 10 Holds in the mix, GOOGL earns a Moderate Buy consensus. The average price target stands at $196.94, suggesting a 30% upside from here. (See GOOGL stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.