Citi sees Alphabet earnings being upside catalyst

Alphabet (GOOGL), the parent company of Google, is scheduled to report first quarter 2026 results after the market close on Wednesday, April 29, with a conference call scheduled for 4:30 pm Eastern Time. What to watch for:

EXPECTATIONS: Current consensus EPS and revenue forecasts for Alphabet’s March-end quarter stand at $2.67 and $107.03B, respectively, according to data provided by S&P Global Market Intelligence.

That $2.67 EPS estimate for the first quarter is up 14c over the past 90 days ago, according to S&P data.

AI FUELS GROWTH, SPENDING: Along with the company’s last report, Sundar Pichai, CEO of Alphabet and Google, said: “It was a tremendous quarter for Alphabet and annual revenues exceeded $400 billion for the first time. The launch of Gemini 3 was a major milestone and we have great momentum. Our first party models, like Gemini, now process over 10 billion tokens per minute via direct API use by our customers, and the Gemini App has grown to over 750 million monthly active users. Search saw more usage than ever before, with AI continuing to drive an expansionary moment.”

The company also said: “We’re seeing our AI investments and infrastructure drive revenue and growth across the board. To meet customer demand and capitalize on the growing opportunities we have ahead of us, our 2026 CapEx investments are anticipated to be in the range of $175 to $185 billion.”

WELLS, CITI BULLISH: In February, Wells Fargo upgraded Alphabet to Overweight from Equal Weight with a price target of $387, up from $354. The company has a leadership position in the “three key traits” of an AI winner: customer data, distribution, and compute capacity, the analyst told investors. Wells says its capacity analysis confirms Alphabet has an opportunity to exploit data and distribution advantages for consumer and enterprise AI products. Project Google expands the company’s compute capacity to 35GW by 2028 from 15GW at the end of 2025, extending its capacity lead relative to the hyperscaler peer group, contends Wells, which argues that “capacity is king.”

More recently, Wells Fargo lowered the firm’s price target on Alphabet to $361 from $397. The firm sees Q1 as a positive inflection point in free cash flow revisions, with expected upward revenue and operating income estimate revisions, the firm noted.

On April 14, Citi raised the firm’s price target on Alphabet to $405 from $390 and kept a Buy rating on the shares. Citi also added an “upside 90-day catalyst watch” on Alphabet ahead of the Q1 report. Given its positive online advertising checks and Google Cloud demand momentum, Citi believes Alphabet’s results results are likely to beat expectations.

Last week, BMO Capital raised the firm’s price target on Alphabet to $410 from $400 and kept an Outperform rating on the shares. The stock remains the best way to own AI within the firm’s coverage as it continues to expand its leadership positions across the AI stack, the analyst told investors. BMO added that its web-traffic analysis implies accelerating year-over-year visit growth to Google.com, suggesting that Alphabet continues to effectively integrate AI Overviews into Search.

SENTIMENT: Check out recent Media Buzz Sentiment on Alphabet as measured by TipRanks.