Google earnings arrive with the company facing both AI and legal threats-OxBig News Network

Wall Street analysts expect Alphabet to report earnings per share of $2.01, up 6% from 2024, on sales of $89 billion, up 11%.

But investors are already looking past the first quarter in this uncertain environment. So far this earnings season, several notable companies have withdrawn annual guidance, like Tesla, or given conditional guidance, like United Airlines.

Alphabet has long chosen not to give specific guidance on revenue or earnings. Rather, its chief financial officer, now Anat Ashkenazi, presents the company’s views on the moving parts for the coming quarter and the year. When Ashkenazi made her presentation three months ago, there was no mention of a trade war or macroeconomic uncertainty, and investors will want to know her thoughts on how that affects Alphabet’s coming quarters. Of particular interest will be advertising revenue from Chinese companies, like e-commerce players Temu and Shein, who are selling to U.S. customers.

There is also the issue of capital expenditures amid the AI race with Microsoft, Amazon.com, and Meta Platforms. Google has projected $75 billion in 2025 capex, up 43% from 2024, which was up 63% from the previous year. Depreciation expenses, up 28% last year, will continue to pile up in 2025. Investors will want to see signs of moderation, or returns from all the investment. Macro uncertainty may figure into this conversation, as well.

Alphabet is also seeing pressure from external sources. It’s engaged in two antitrust suits with the Department of Justice. Both have been decided in the government’s favor, and the first one is in the middle of a short trial to determine the penalties Google will face. The government is asking for draconian measures, like requiring Google to share its search and ad indexes with competitors, or even a breakup of the company.

In Europe, meanwhile, the recent fines for Apple and Meta are an indication the European Commission will rigorously enforce its Digital Markets Act and the Digital Services Act, both of which are likely to affect Alphabet.

Just as Google is being called a monopoly by courts—and dealing with a growing number of regulatory issues—its search dominance is under threat by AI search engines from Perplexity, OpenAI, and Anthropic.

Until recently, Alphabet was a fairly simple story of growing ad revenue on top of a booming cloud business. Now, the business is increasingly complex, and investors have new questions and concerns.

Shares of Alphabet are down 17.9% so far this year.

Write to Adam Levine at [email protected]