Alphabet Inc (NASDAQ:GOOG) third-quarter update later this month is shaping up to be another test of how fast the tech giant can turn its artificial intelligence ambitions into hard cash.
Citi expects the numbers on October 29 to beat Wall Street’s forecasts, helped by steady advertising growth and strong demand for Google Cloud services.
Discussions with advertisers, agencies, and digital platforms point to a healthy backdrop for online ad spending, especially in retail and travel. That momentum, coupled with improved monetization in YouTube and Maps, should push revenue and earnings per share above consensus estimates.
But the bigger story is Alphabet’s accelerating push into generative AI. Citi sees Google’s “agentic” product strategy, embedding autonomous, AI-driven functions across its ecosystem, as the next stage of growth.
The newly launched Agentic Chrome browser and the broader roll-out of AI-O and AI-M tools, now reaching more than two billion monthly users, illustrate that strategy in action.
Gemini, Google’s flagship AI model, continues to scale rapidly, with token usage surpassing 1.3 quadrillion.
Competition remains intense. ChatGPT’s expansion to over 800 million weekly active users and its move into integrated apps, instant checkout, and video generation through Sora underline the stakes.
Yet Citi argues that Alphabet’s scale, distribution, and data advantage leave it well positioned to compete.
Operationally, the firm expects efficiency gains to drive margins higher, offsetting heavier AI-related spending. Citi maintains its Buy rating and $280 price target, saying Alphabet’s blend of strong core businesses and an accelerating AI roadmap supports further upside.
In short, the company that defined search is now racing to define the next era of “agentic” AI. If Citi is right, Alphabet’s third quarter may offer the clearest sign yet that this shift is beginning to pay off.