Should You Buy Alphabet Stock Before July 22? Wall Street Has a Clear Answer.

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) will announce its second-quarter financial results after the market closes on Wednesday, July 22. The stock is up 87% in the past year, but it's also down 14% from the record high it reached in May.

Should investors buy a few shares ahead of the earnings report? Most Wall Street analysts say the answer is "yes." Alphabet has a median target price of $440 per share, which implies 27% upside from the current share price of $346. However, investors should first acquaint themselves with the company.

Read on to learn more.

Image source: The Motley Fool.

Here's what Wall Street expects when Alphabet reports earnings on July 22

Alphabet reported impressive financial results in the first quarter. Revenue increased 22% to $109.8 billion, the fourth straight acceleration, driven by particularly strong sales growth in the cloud segment, which itself was due to insatiable demand for artificial intelligence (AI) infrastructure.

Meanwhile, net income increased 82% to $5.11 per diluted share, but that figure was inflated by unrealized investment gains, primarily from Alphabet's stake in SpaceX. Operating earnings, which excludes those investment gains, increased 29% to $39.6 billion.

Alphabet didn't provide guidance for the second quarter. But the Wall Street consensus estimate says revenue will increase 21% to $116.8 billion and earnings (excluding the impact of unrealized investment gains) will increase 25% to $2.89 per diluted share.

Investors should review management's commentary about capital expenditures (capex), meaning what the company plans to spend on property, plants, and equipment this year. During the first-quarter earnings call, management said capex would total $180 billion to $190 billion in 2026, slightly higher than what it projected earlier in the year. Investors may get nervous if the company revises that figure even higher.

The investment thesis for Alphabet centers on AI cloud services

Alphabet's primary growth driver will be its cloud computing business. The company still trails Amazon and Microsoft, but it's steadily gaining market share because of the popularity of its Gemini models and custom AI accelerators called tensor processing units (TPUs). Google Cloud accounted for 14% of cloud infrastructure spending in Q1 2026, up from 12% in Q1 2025.

Gemini could become a major source of revenue. Using Google Cloud tools, developers can fine-tune and integrate the models into custom applications. For instance, Apple used Gemini infrastructure to develop the foundation models that power its upgraded Siri voice assistant. But Alphabet also offers prebuilt applications, such as the AI agent Gemini Spark.

TPUs could also become a major source of revenue. Earlier this year, Alphabet announced plans to create a new AI cloud company in partnership with private equity firm Blackstone. Unlike other cloud platforms, TPUs (rather than Nvidia GPUs) will power the infrastructure. Additionally, Alphabet recently started selling TPUs to customers for use in their own data centers.

Morgan Stanley analyst Brian Nowak estimates TPUs will account for 25% of Google Cloud revenue by 2028, up from about 5% today. In turn, he expects Google Cloud revenue to grow at 75% annually over that period, bringing Alphabet's companywide earnings per share to $19 in 2028. That implies annual growth of 15%, which more or less aligns with the Wall Street consensus.

In that context, Alphabet's current valuation of 26 times earnings looks quite reasonable. That's especially true because the company has another compelling growth opportunity in its autonomous driving business Waymo. Investors should feel comfortable buying a small position today, though I would keep some cash in reserve to capitalize on a post-earnings dip should the company's second-quarter results fail to impress.

Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Blackstone, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.