Bank of America Securities analyst Justin Post highlights that Alphabet is entering its fourth-quarter earnings cycle with accelerating demand for AI-powered advertising and search services. He forecasts Search revenue growth of 15%–16% year-over-year, versus consensus near 13%, driven by increased user engagement with the Gemini AI model. YouTube ad sales are expected to expand 14%–15%, topping Street projections of roughly 13%, as advertisers allocate higher budgets to AI-enhanced targeting and video formats.

Post projects fourth-quarter revenue of $95.9 billion and EPS of $2.65, beating Street estimates of $95.2 billion and $2.64. He anticipates operating expenses of $28.0 billion (up 13% from a year earlier) and an operating margin expansion of 119 basis points. Looking ahead, he raised his first-quarter forecast to $90.1 billion in revenue and $2.56 in EPS, compared with consensus figures near $88.8 billion and $2.54, underscoring confidence in continued AI-driven acceleration.

Reflecting the need to support surging AI workloads, Post increased his 2026 capital expenditures estimate by 14% to approximately $139 billion, well above Street levels near $119 billion. He correspondingly trimmed his free cash flow projection for 2026 to about $53 billion. On the revenue side, he lifted fourth-quarter Search to $61.9 billion and YouTube to $12.0 billion, both representing 15% year-over-year growth, and increased other income to $1.3 billion from $0.8 billion to account for mark-to-market gains on strategic stakes such as SpaceX and Anthropic.