Alphabet Poised For Third-Quarter Beat Amid Cloud Strength, BofA Says

12:57 PM EDT, 10/20/2026 (MT Newswires) -- Alphabet's (GOOGL, GOOG) third-quarter results are likely to exceed Wall Street's estimates on the back of accelerating Google cloud revenue amid the booming artificial intelligence demand, BofA Securities said in a note e-mailed Tuesday. The brokerage expects the technology giant's earnings of $3.07 a share on net revenue $111.42 billion for the September quarter, ahead of the Street's views for $2.98 and $111.03 billion, respectively. The top-line estimate represents a 27% growth year over year, according to BofA. The brokerage's projections assume a 93% surge in cloud revenue to $29.29 billion, compared with the consensus of $28.61 billion. Search and YouTube sales are likely to post growth deceleration in the third quarter sequentially, but rise by a double-digit percentage each annually, according to BofA. "We expect healthy revenue growth across all business lines, with cloud acceleration driving stable net revenue growth," BofA analyst Justin Post said in a note to clients. "We see potential for upside at cloud, driven by capacity growth and incremental (tensor processing unit) sales." For the ongoing quarter, the brokerage projects Alphabet's EPS to match the Street's views at $3.33, while its revenue outlook of $123.88 billion is slightly ahead of the consensus views for $123.79 billion, with "some outlook risk on growing AI capacity expense." BofA estimates the company's 2026 capital expenditures at roughly $200 billion, compared with the Street's $202 billion projections, while next year's CapEx is pegged at $300 billion with bias to the upside, according to the note. "Given Google's extensive AI investment and growing cloud business, we think the company's CapEx spend could be relatively efficient (versus) peers, likely benefiting from TPU usage for internal AI capabilities," Post wrote. Alphabet is scheduled to report third-quarter results Oct. 28, the same day when Microsoft (MSFT) will announce its fiscal first-quarter performance. "We think Alphabet remains well positioned to drive outsized advertising and cloud growth given favorable positioning across foundational models, custom silicon, consumer distribution, and enterprise distribution," Post said in the note. "As both consumer and enterprise adoption of AI services increases, especially for cloud, it could support more durable revenue growth and a higher valuation." On Monday, Morgan Stanley said Microsoft's upcoming quarterly results will likely meet the Street's expectations, driven by sustained momentum in its Azure cloud computing platform. E-commerce giant Amazon.com (AMZN) is scheduled to release its third-quarter results Oct. 29. Price: 341.39, Change: -2.79, Percent Change: -0.81