Alphabet Inc. (NASDAQ: GOOGL) is set to report its first-quarter earnings today after market close, becoming the first trillion-dollar tech titan to lift the lid on how 2025’s economic volatility is shaping Big Tech performance. As recession fears and global tariff tensions shake investor confidence, Google’s earnings report could determine more than just the future of its stock—it may set the tone for the entire tech sector.
GOOGL Stock Eyes Recovery as Wall Street Watches Closely
Analyst expectations heading into today’s report point to a revenue figure of $89.2 billion and earnings per share (EPS) of $2.01. If Alphabet hits these targets, it would reflect an 11% increase in revenue and 6% growth in earnings compared to the first quarter of 2024. Google Search is expected to have pulled in over $50 billion, while its Google Cloud division—supercharged by artificial intelligence—may top $12 billion in quarterly revenue, a near 28% jump year-over-year.
Despite this solid growth outlook, Alphabet’s stock performance in 2025 has been anything but stable. Shares are down over 16% year-to-date, underperforming even the tech-heavy Nasdaq. Much of this drag is tied to ongoing economic anxiety and escalating trade tensions, with President Donald Trump’s renewed tariffs on Chinese imports impacting global supply chains and marketing budgets alike.
Tariffs Squeeze Google’s Ad Revenue, But Less Than Rivals
While digital advertising remains Alphabet’s cash cow, it hasn’t been immune to tariff-driven cuts in ad spending. Chinese retailers like Temu and Shein have reportedly pulled back on U.S.-based ad campaigns due to rising trade barriers. But Google may be better insulated than competitors like Meta, as only about 4% to 5% of its ad revenue is tied to Chinese companies—compared to as much as 8% for Facebook’s parent company.
Still, analysts caution that even a slight earnings miss could rattle investors, especially with Alphabet under intensifying regulatory scrutiny and facing potential shifts in consumer and corporate ad spend patterns. But in a note to clients, Bank of America said investors would likely consider even an “in-line” quarter a win given the deteriorating business sentiment around the globe.
AI: Google’s Not-So-Secret Weapon
Alphabet may be grappling with macro pressures, but it has an ace up its sleeve—artificial intelligence. The company has embedded AI across nearly every arm of its business. Its Gemini AI platform, now reaching over 2 billion users, powers products from Google Search to Cloud to Android smartphones. In fact, Samsung’s newest devices feature Gemini as the default assistant, and the feature’s Circle to Search function is already on more than 200 million Android phones.
The push into ad-supported AI is also beginning to materialize. Alphabet plans to monetize Gemini through new advertising layers, potentially driving fresh ad revenue from its vast user base. Meanwhile, Google Cloud continues to see explosive growth, benefiting from skyrocketing demand for AI-powered infrastructure and tools. Analysts estimate that cloud-based AI services will grow 30% annually through the next decade, putting Google in a prime position to lead.
Analysts Split on What’s Next for GOOGL Stock
Financial experts are divided on whether now is the time to buy Alphabet stock. Zacks Equity Research notes that Alphabet has consistently beaten earnings expectations, with an average surprise of over 11% across the past four quarters. This gives bulls hope that another strong report could trigger a stock rebound. However, caution lingers around several unresolved headwinds.
Alphabet is still facing multiple antitrust battles. Just last week, a federal judge ruled the company holds an illegal monopoly in the ad tech space. Meanwhile, the Department of Justice continues to push for Alphabet to divest its Chrome browser, further increasing regulatory uncertainty.
On top of that, global trade remains fragile, and Alphabet’s exposure to international retaliation—particularly from China and the EU—could complicate the path forward. Add in the risk of a recession and pressure from rivals like Microsoft and Amazon in both AI and cloud computing, and the outlook remains highly nuanced.
The Bigger Picture: Alphabet’s Earnings Will Set the Tone for Tech
With Tesla having already missed on both earnings and revenue this week, Alphabet now carries the burden of setting a positive tone ahead of next week’s reports from Apple, Amazon, Meta, and Microsoft. As one of the original “Magnificent Seven” stocks, Google’s results are likely to ripple across Wall Street, impacting broader tech sentiment and potentially influencing policy discussions as well.
Despite a rocky start to 2025, Alphabet still holds strong fundamentals. It remains a leader in search, a major player in cloud computing, and one of the most deeply integrated companies in artificial intelligence. For long-term investors, today’s report could either validate recent selloffs or trigger the beginning of a recovery—especially if AI continues to deliver results that exceed expectations.
If you’re looking for a long-term AI and cloud play with dominant market share and deep integration across billions of devices, Alphabet remains a compelling option. While short-term volatility tied to tariffs and regulation will likely continue, Alphabet’s innovation engine shows no signs of slowing. Today’s earnings call will be key to determining whether GOOGL stock is primed for a rebound—or set to remain under pressure as 2025 unfolds.