Alphabet (GOOGL US) Buy: Q2 preview – three key questions

研报英文原文证据摘录

Alphabet (GOOGL US) Buy: Q2 preview – three key questions

ing too high currently? Elsewhere, our other key 52-WEEK PRICE (USD)

expectations are below and our full estimates are overleaf. 450.00

◆ Google Services: saw a strong Q1 print with revenues +19% yoy, leading to 300.00

record EBIT margins within Services of 45.3%. We expect margins to soften from 150.00

those highs due to lower levels of Search in the mix. Elsewhere, we don’t expect 07/25 01/26 07/26 Target price: 420.00

Google to shift to push adverts though Gemini at this stage, nor are we expecting High: 402.62 Low: 180.19 Current: 357.18

monetisation gains in AI Mode or AI Overviews. Source: LSEG IBES, HSBC estimates

◆ Google Cloud capacity constraints to continue: Commentary from the Q1 Paul Rossington*

results was that cloud capacity constraints will remain over 2026 and we expect Senior Global Tech Platforms Analyst

HSBC Bank plc

this commentary to continue from results across the hyperscaler space. paul.rossington@hsbcib.com

However, the scale of margin gains seen over 2025 and Q1 should not be +44 20 7991 6734

expected to continue in Q2 due to the completion of the Wiz acquisition in Q1. As Charlie Rothbarth*

Global Tech Platforms Analyst

a reminder, Google Cloud backlog at Q1 was cUSD460bn. HSBC Bank plc

charlie.rothbarth@hsbc.com

◆ Capex: 2026 capex guidance is USD180-190bn, +102% yoy at the mid-point +44 203 2685284

and broadly all of CFO for the year. We continue to see it as CFO for capex and Nicolas Cote-Colisson*

MD, Head of Global Tech Platforms

capital raises for acquisitions/other strategy. Therefore we expect capex HSBC Continental Europe

guidance for 2026 to remain unchanged or see a small increase. nicolas.cote-colisson@hsbcib.com

+44 20 7991 6826