Alphabet Stock Poised for Growth Ahead of Q3 Earnings Report on Oct. 28

Key Points

• Corporate earnings season is approaching, and it may set the tone for the broader stock market through the end of 2026.

• Alphabet, the parent company of Google, will announce its third-quarter financial results after markets close on Oct. 28.

• Continued growth in Google Search and Google Cloud is expected to drive significant upside in Alphabet’s stock.

The S&P 500 recently reached a new all-time high, supported by strong investor confidence tied to advancements in artificial intelligence (AI). As a result, solid corporate earnings have become essential to sustaining market momentum, especially among major technology firms set to report earnings over the coming weeks.

Alphabet ((NASDAQ: GOOG)(NASDAQ: GOOGL)) is slated to release its third-quarter results on Oct. 28. With its stock trading at a balanced valuation ahead of the announcement, there is growing anticipation that it could deliver meaningful gains moving forward.

Image source: Alphabet.

Investors to Watch Google Search and Google Cloud Momentum

While Alphabet operates across multiple sectors, Google Search and Google Cloud remain central to its success. Search generates over half of the company’s revenue, and Cloud continues to expand rapidly.

Although AI-powered chatbots initially raised concerns about shifts in search behavior, Alphabet has integrated AI enhancements into its core offerings. Features such as AI Overviews deliver concise answers using text and visuals directly in search results, while AI Mode offers interactive, chat-like functionality that encourages deeper engagement.

Speaking during the prior quarter’s earnings call, CEO Sundar Pichai noted that AI Mode had exceeded 1 billion monthly active users, reflecting rising engagement. These innovations contributed to a record $63.3 billion in quarterly revenue—a 17% year-over-year increase. Market watchers will be keen to hear how these developments continue to influence performance when results are reported on Oct. 28.

Google Cloud also achieved impressive growth, recording $24.8 billion in revenue with an 84% annual acceleration. By offering scalable cloud infrastructure and pre-trained AI models, the segment supports enterprises building next-generation applications. At the end of Q2, the division reported a robust $514 billion in contracted backlog—indicative of sustained demand for AI-focused computing services.

This backlog figure is likely to attract attention during the upcoming earnings review. Any growth in orders during the third quarter would signal continued strength in enterprise adoption of AI technologies.

Valuation and Earnings Outlook Ahead of Oct. 28

Alphabet’s second-quarter earnings saw a dramatic surge, reaching $9.11 per share—an increase of nearly 300% year-over-year. However, much of this spike stemmed from non-operational factors, particularly Alphabet’s stake in SpaceX following its IPO.

Adjusting for those extraordinary items, analysts project normalized Q3 earnings of approximately $3.02 per share, marking modest year-over-year growth. Forward-looking expectations point to average earnings of $14.98 per share for 2027, implying a forward P/E ratio of roughly 23.4x.

This valuation comes in slightly above the Nasdaq-100 benchmark but appears justified given the rapid expansion of AI-enabled services within Google Search and Cloud divisions. Over the past year, shares have appreciated close to 45%, and many believe the third-quarter report will set the stage for further upward movement.

Conclusion: What to Expect When Alphabet Reports

Investors are encouraged to evaluate whether recent developments align with current market valuations. While Alphabet remains a dominant force in digital advertising and cloud computing, assessing its trajectory requires careful evaluation of operational trends versus one-time gains.

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