Alphabet (NASDAQ:GOOGL) is slated to unveil its fourth-quarter 2023 results on January 30.

The Consensus Estimate for Q4 revenues stands at $70.71 billion, reflecting a 12% improvement from the corresponding figure reported last year. As for earnings, the consensus projection is $1.60, indicating a substantial 52.4% growth compared to the previous year. This figure has remained consistent over the past 30 days.

Alphabet has surpassed the Consensus Estimate in three out of the last four quarters, with an average earnings surprise of 4.62%.

Consideration for Search, YouTube & Advertising Efforts

Alphabet’s ongoing innovation in artificial intelligence (AI) techniques, particularly in its search segment, is expected to boost traffic on its platform in the upcoming quarterly report. The integration of generative AI technology into the search engine, driven by large language models (LLM), is likely to enhance search results and momentum.

The integration of Bard into the search platform, particularly through Assistant with Bard, is anticipated to further enhance AI-backed search results and contribute to increased search traffic. The Search Generative Experience (SGE), leveraging generative AI technology for more natural and intuitive search results, is expected to contribute positively, alongside the strength in Google Lens and Google Maps.

The Consensus Estimate for Google Search & Other revenues is projected at $47.84 billion, reflecting a 12.3% increase from the same quarter last year.

In the advertising business, Alphabet’s focus on delivering better performance and profitability through foundational research models and LLMs is expected to contribute positively. The Search Generative Experience (SGE) is likely to enhance advertising capabilities, creating relevant and high-quality ads. Stabilization in advertisers’ spending, strength in conversational experience through Google Ads and Performance Max, and improved performance of YouTube ads are anticipated positives.

However, concerns persist about softness in Network advertising. The consensus estimate for Google advertising is $65.45 billion, indicating growth of 10.8% from the previous year.

YouTube’s non-advertisement revenues are expected to benefit from the momentum in YouTube Shorts and strengthened relationships with content creators. Updates and user-friendly features in YouTube Premium are likely to boost the Premium subscriber base, and strong momentum in Connected TV is considered a positive. The consensus estimate for Other revenues is $9.65 billion, signifying a 9.7% increase from the same quarter last year.

Android 14’s growing momentum is expected to contribute to Alphabet’s Services segment performance in Q4. The Consensus Estimate for Google Services revenues is $74.95 billion, indicating a growth of 10.5%.

Strength in Cloud & Other Bets

Alphabet’s go-to-market strategy and the expansion of its cloud service portfolio, along with strengthening cloud infrastructure, are expected to benefit the Google Cloud segment. The Consensus Estimate for Google Cloud revenues is $9.04 billion, reflecting a growth of 23.6%.

Alphabet’s efforts in enhancing its healthcare technology portfolio are likely to drive growth in its Other Bets segment. The Consensus Estimate for Other Bets revenues is $251 million, indicating growth of 31.9% from the same quarter last year.

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