Alphabet (GOOGL) is set to report third-quarter 2025 results on Oct. 30. The Zacks Consensus Estimate for earnings is $2.27 per share, indicating 7.1% year-over-year growth. Revenues are estimated at $84.57 billion, up 13.4% from the year-ago quarter.

Alphabet has a strong earnings surprise history, with an average surprise of 15.96% in the past four quarters. The Search business, benefiting from AI infusion, holds a 90.4% market share. The Zacks Consensus Estimate for third-quarter Search and other revenues is $55.09 billion, up 11.5% year over year.

Alphabet’s Cloud segment is gaining market share, with Google Cloud positioned as the third-largest provider. The consensus estimate for third-quarter Google Cloud revenues is $14.66 billion, indicating 29.1% growth. However, capacity constraints may impact cloud revenue until new capacity comes online in 2025.

Alphabet shares have outperformed the Internet Services industry and Computer & Technology sector, rising 34.7% year-to-date. Despite strong performance, GOOGL is trading at a premium compared to the industry. Technically, GOOGL shares are showing a bullish trend, trading above the 50-day and 200-day moving averages.

Alphabet continues to introduce AI-powered features to enhance user engagement in Search. Google Cloud’s expanding clientele and partnerships with companies like NVIDIA are set to boost top-line growth. Easing regulatory concerns following a favorable ruling in an antitrust lawsuit are also positive factors for Alphabet’s outlook.

Alphabet’s dominant position in Search and expanding cloud footprint are strong growth drivers. However, a stretched valuation and intense competition in the cloud space pose risks for investors. With a Zacks Rank #3 (Hold), it may be prudent to wait for a more favorable entry point in GOOGL stock.

Read more at Nasdaq: Buy, Sell or Hold GOOGL Stock Before Q3 Earnings? Here’s What to Know