Alphabet's Q3 results likely to be aided by YouTube, search, AI: BofA
Alexander Koerner
Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), the parent company of Google, is slated to report third-quarter results on October 24 and investment firm Bank of America said it is expecting "favorable" headlines, due in part to strength in YouTube, search and artificial intelligence.
Analyst Justin Post, who has a buy rating and $146 price target on Alphabet (GOOG) (GOOGL) shares, said he is expecting search revenue growth to come in "slightly above" Wall Street's estimates, at 11% year-over-year. He's also expecting above consensus growth for YouTube and in-line for Cloud, at 12% and 26%, respectively. 
Post also pointed out that the company is focusing more on costs, which should help margins rise 400 basis points year-over-year to 34.3%. 
"We remain constructive on Google and expect continued [second-half] acceleration in Search and YouTube growth driven by macro improvements, new advertiser AI tools, ramping shorts monetization, and FX," Post wrote in a note to clients. 
He added that the release of its Gemini large language model "could be a catalyst" and that Wall Street is "underestimating the benefits of AI integration into search, and potential monetization benefit over time." Gemini could be released before the end of the year, according to various industry reports. 
Looking to the quarter, Post is expecting Alphabet to earn $1.48 per share on $76.6B in gross revenue, above the consensus estimate of $1.45 and $75.76B, respectively.
Alphabet (GOOG) (GOOGL) shares slipped fractionally in pre-market trading on Tuesday.

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