Despite the wider Dow Jones Industrial Average (DJIA) slip on Tuesday, Google (NASDAQ: GOOGL) stock appears to be in a particularly strong position ahead of its upcoming February 4 earnings report.
Not only is the momentum behind GOOGL shares mostly positive, with an 8.94% year-to-date (YTD) rally to $341.85, but the business-side news for Alphabet has generally been upbeat across the board.
The overall positivity, however, might be obfuscating a series of systemic risks that are slowly taking hold in the 2026 financial markets, meaning the question of whether Google stock is a buy ahead of the earnings is very much open.
Why Google stock is a buy ahead of the earnings
Alphabet has been growing according to the most recent reports in most divisions. Google’s Gemini artificial intelligence (AI) platform, for example, appears to have eaten into ChatGPT’s web traffic despite a slow start, and the agent’s market share now stands at approximately 20%.
The more core ‘Search’ business also appears to have stabilized.
Changes made in 2024 and 2025 cost the technology titan some market share as users were generally dissatisfied with performance, and as third-party website traffic crashed largely due to ‘AI overview,’ but the dominance appears to have stabilized close to 90% by February 2026.
Legally, Google has not only all but resolved its long-running antitrust fight with Epic – the company behind the popular video game Fortnite – but appears to have settled on an $800 million Unreal Engine deal with the other technology giant.
Lastly, Alphabet’s autonomous car company, Waymo, is also doing well, as seen from its ability to close a $16 billion fundraising round as recently as February 2.
Wall Street remains bullish about Google stock
Considering the general situation and Google stock’s steady rise in the last 12 months, the fact that Wall Street expects Alphabet’s earnings per share (EPS) to have risen to $2.58 in the fourth quarter (Q4) – the results of which will be unveiled after the closing bell on February 4 – is hardly surprising.
The expectation for the coming earnings is 14.2% higher than the $2.26 forecasted for Q3, showing strong analyst optimism, but investors should be mindful that GOOGL shares could react negatively if the expectations are merely met or only moderately exceeded.
Specifically, the last-quarter surprise was rather large, coming in at 27% with an EPS of $2.87, meaning that Google would have to show it exceeded the consensus by at least 11% to maintain the tailwinds.
Even more dangerous is the fact that Alphabet would have to report an EPS of at least $3.28 to guarantee a rally, as only such a figure would match the Q3 surprise.
While Google has historically been managing to beat forecasts and has, indeed, overachieved in every single report since Q4, 2024, the high expectations paired with the company’s perpetually elevated valuation pose a certain risk.
Why Google stock might not be a buy in 2026
Likewise, the overall state of the AI boom – an aspect that has been growing more important for Alphabet just as for other big tech firms in recent years – represents another potential danger.
Most recent headlines related to artificial intelligence have been cautious in tone as signals that the sector is buckling have been growing more and more numerous.
The revelation that as much as 45% of Microsoft’s (NASDAQ: MSFT) backlog can be made or broken by OpenAI made an ill pairing with the company’s diminishing margins and caused a stock market bloodbath after the firm published its own earnings.
Speaking of OpenAI, the most recognizable artificial intelligence company is itself a systemic risk for big tech.
On the one hand, the firm’s recent consideration of introducing advertisements into the chatbot led some observers to think it is running out of money due to how hostile Sam Altman used to be to such practices.
On the other hand, the fact that Nvidia (NASDAQ: NVDA) apparently decided to renege on its previous statement of intent to invest $100 billion in OpenAI eroded confidence.
Another potential issue – and especially given the hopes for Google’s cloud business – has been the recent concerns that production constraints and the energy bottleneck could leave many of the new data centers unused.
Specifically, data center power figures that have come into vogue in 2025, such as 10 gigawatts, appear unsustainable due to environmental concerns, the time construction takes, and the simple fact it is more energy than needed to keep New York City lit.
The apparent overreach in terms of promises made by big tech – promises that helped the sector’s sky-high valuation in remarkable rallies – is also apparently evident in the rising number of cancelled data centers.
Featured image via Shutterstock
