Bank of America Forecasts $92B Q1 Revenue, 49% Cloud Growth for Alphabet
Bank of America forecasts Alphabet to post Q1 revenue of $92 billion and EPS of $2.69, above consensus, with search revenue up 18% and Cloud growth accelerating to 49%. Peers Microsoft and Meta are cutting workforces by 7% and 10% respectively as AI spending intensifies.
1. Bank of America Q1 Outlook
Bank of America expects Alphabet to generate Q1 revenue of $92 billion and earnings per share of $2.69, modestly above market consensus estimates of $91.7 billion and $2.66, reflecting resilient search demand and early benefits from AI integration.
2. Search and Cloud Performance
Search and related advertising revenue is projected to grow around 18% year-over-year, while Cloud revenue is anticipated to accelerate by one percentage point quarter-over-quarter to 49%, supported by AI-driven features and infrastructure investments.
3. Margin and Other Income Outlook
Overall operating margin is forecast to expand to approximately 40.5% as gains in Cloud profitability offset pressures in core segments, and other income is expected to benefit from potential valuation gains on investments such as Anthropic.
4. Peer Workforce Adjustments
Peers are adjusting workforces in response to rising AI spend, with Microsoft offering voluntary buyouts for roughly 7% of US staff and Meta planning to cut about 10% of its workforce to redirect resources toward AI initiatives.