Alphabet GOOGL is scheduled to report third-quarter 2021 results on Oct 26.

For the quarter under review, the Zacks Consensus Estimate for revenues is pegged at $51.41 billion, indicating an improvement of 35.3% from the year-ago reported number.

Further, the consensus mark for earnings is pegged at $23.13, indicating a 41% rise from the previous year’s reported figure. Notably, the figure has moved up 0.04% over the past 30 days.

The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 47.24%, on average.

Alphabet Inc. Price and EPS Surprise

Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote

Search, Ad & Cloud Momentum: Key Catalysts

Alphabet’s robust Search segment remains the key catalyst for the company’s top-line growth. Its expanding ad services portfolio, strong search engine and improving search results are likely to have benefited the third-quarter performance.

We believe that the company’s continued efforts toward the advancement of its Search segment are expected to have continued driving traffic on its platform in the third quarter.

The introduction of AI-backed Multitask Unified Models (MUM) technology is likely to have continued enhancing the search results to the unique queries of users.

Further, the announcement of LaMDA is expected to have benefited the Search segment on the back of its advanced conversational skills.

Apart from this, the growing momentum across its mobile search is anticipated to have been another positive.

Google has been gaining traction with the Local Services ads. This is expected to get reflected in its third-quarter advertisement revenues.

Coming to cloud prospects, the company has been significantly gaining momentum in the highly competitive cloud market on the back of its expanding cloud services portfolio and an increasing number of data centers.

The company’s go-to-market strategy, and strengthening cloud infrastructure and ecosystem are expected to get reflected in its third-quarter revenues.

The solid adoption of Google Workspace is likely to have contributed well to the performance of the Google Cloud segment in the to-be-reported quarter.

Android, Meet, Waymo, Nest & Google TV Efforts to Consider

Google’s strength across Android, digital payment, autonomous driving and healthcare is anticipated to have aided its third-quarter performance.

New Android features like end-to-end encryption, voice recognition and Starred message features for its Messages application are likely to have continued helping the company in delivering enhanced user experience.

Google’s persistent efforts in infusing its video conferencing software — Google Meet — with advanced features are likely to have bolstered its user base in the quarter-to-be-reported. The company made an advancement in Google Meet, with the help of which the software will notify users when there will be echo on video calls.

Further, Google collaborated with Cisco Systems CSCO for supporting interoperability. Customers using a Cisco device can log into a Google meeting, while those using a Google device can log into a Cisco Webex meeting.

The growing prospects around Alphabet’s self-driving unit — Waymo — are expected to have been other major tailwinds. In the quarter, the company expanded its Early Rider program called Waymo One Trusted Tester to San Francisco, CA. This marked the first expansion of the driverless ride-hailing service of Waymo outside Phoenix, AZ.

The company’s efforts toward expanding its Nest family are likely to have aided its third-quarter performance. Google introduced settings on the smart displays of its devices namely Nest Hub and Nest Hub Max. The device settings in the Google Home app show a new option called Air Quality under the Photo Frame menu, with manual options to hide or show.

Apart from this, the company’s strong Google TV efforts are expected to have driven its momentum in the streaming market in the quarter under review. Google integrated more than 30 streaming services into Google TV to provide access to several contents from the services in one place.

On Google TV, users can stream content not only from YouTube TV and Google TV but also from Disney+, Prime Video, Hulu, HBO Max, HBO Go, Peacock, Comedy Central, Pluto TV, Viki/Rakuten, Fox Now, Paramount+ and ABC, to name a few.

The company also introduced a remote-control experience on smartphones for Google TV users. Further, the search giant has added a section called “Watch with Me” on Google TV, which highlights TV shows and movies recommended by celebrities.

What Our Model Says

Our proven model conclusively predicts an earnings beat for Alphabet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Alphabet has an Earnings ESP of +7.71% and a Zacks Rank #2 at present.

Other Stocks to Consider

Here are some other stocks that you may consider as our model shows that these too have the right combination of elements to beat on earnings this season.

Amphenol Corporation APH has an Earnings ESP of +1.02% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

CACI International CACI has an Earnings ESP of +4.43% and a Zacks Rank of 2, at present.

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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report

Amphenol Corporation (APH) : Free Stock Analysis Report

CACI International, Inc. (CACI) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

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