AI monetization and “Gemini” integration
The central narrative for 2026 is the transition from AI experimentation to monetization. Alphabet has aggressively integrated its Gemini models across its ecosystem.
Investors will scan the report for:
Search evolution: Updates on “AI Overviews” and their impact on user engagement and ad click-through rates.
Enterprise adoption: Updates on Gemini for Workspace and the rate at which enterprise customers are converting from free trials to paid tiers.
Partnerships: Any further commentary on the high-profile collaboration with Apple to integrate Gemini into “Apple Intelligence” features.
Google Cloud’s Battle for Market Share
Google Cloud has historically been the “third player” behind AWS and Azure, but it has recently shown faster growth rates. With a reported backlog of $155 billion at the end of Q3, the focus will be on conversion velocity, how quickly that backlog is turning into realized revenue and whether cloud margins continue to expand despite the heavy cost of AI infrastructure.
Capex and 2026 guidance
Capital expenditure (Capex) has become the most scrutinized metric for big tech. Alphabet previously guided for 2025 Capex between $91 billion and $93 billion. Investors are wary of “over-spending” without immediate returns. A guide for 2026 that shows a stabilization or “peaking” of investment could be seen as a positive for free cash flow, while a massive hike without clear revenue justification might spook the market.
Regulatory and macro headwinds
While the AI rally has dominated headlines, regulatory scrutiny remains a background noise. Additionally, analysts will look for the impact of a “post-election” cooling in digital ad spending, as the massive surge from the 2024 US elections will create a tough year-over-year comparison for the YouTube and Search segments.
