Investing.com - Google's parent company, Alphabet (NASDAQ:GOOGL) Inc (NASDAQ:GOOG), is set to announce its third-quarter results on Tuesday, with analysts forecasting a surge in earnings due to easier year-on-year comparisons. According to consensus estimates for GOOGL stock, the advertising revenue growth of YouTube, Google's video-sharing platform, is also expected to bounce back.
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Analysts predict a substantial 37% rise in EPS to $1.46 for the internet search giant when it announces earnings for the September quarter after the market close. Google's earnings increased by 17% in the June quarter, breaking a streak of five consecutive quarters of profit decline.
For the third quarter, Google's gross revenue is projected to increase by 10% to $76 billion, as per FactSet data.
Analysts anticipate that core digital ad revenue will increase by 8.6% to $59.1 billion. Evercore ISI analyst Mark Mahaney indicated that "intra-quarter checks" suggest a "continued moderate recovery in the overall ad spending environment with a highly consistent wallet share for internet search."
YouTube's advertising revenue is expected to rise by 10.7% to $7.82 billion, bouncing back from a 2% decline in the September quarter of 2022. Google management is likely to discuss YouTube TV's subscriber growth, particularly in light of its newly acquired streaming rights for NFL Sunday Ticket.
Meanwhile, Google's cloud computing revenue is predicted to grow nearly 26% to $8.64 billion, slightly slower than the 28% growth in Q2.
Analysts are also keen to hear updates on Google's artificial intelligence initiatives, particularly "Gemini," a new large language model. Google is reportedly set to launch the AI model in the fourth quarter, which is expected to compete with startup OpenAI's GPT-4.
In the stock market today, GOOGL stock rose slightly to near 136. Ahead of the Google earnings report, the large-cap tech stock has seen a 53% gain in 2023.