Bank of America analysts are ramping up expectations for Alphabet Inc. (NASDAQ:GOOGL) and Microsoft Corp. (NASDAQ:MSFT), forecasting above-consensus earnings on strong artificial intelligence tailwinds, ad recovery and robust enterprise software demand heading into quarterly results later this month.
Alphabet Expected To Outperform On Search and FX Tailwinds
Alphabet reports its second-quarter results on July 23, and Bank of America analyst Justin Post said the stock looks well-positioned to beat expectations, driven by ad strength, macroeconomic tailwinds, and product monetization improvements from AI.
Post revised its revenue and earnings estimate to $81 billion and $2.21 per share, up from prior forecasts of $80 billion and $2.15. Wall Street consensus sits lower at $79.5 billion and $2.15.
Alphabet’s core search revenue is expected to rise 11% year-over-year, ahead of Street estimates of 9%.
Search revenue has been the most closely watched—and arguably the most feared—metric for investors, as the rise of AI platforms threatens to bypass traditional search engines and disrupt Google’s core business model.
“We think Street estimates for Search… have upside,” Post said, citing stable spending …