Alphabet Inc. ( GOOG )‘s stock is moving higher Friday ahead of its fourth-quarter earnings report, with analysts from Bank of America maintaining a positive outlook on the company's performance.

What To Know: The firm noted that strong e-commerce ad spending and Meta's recent ad revenue beat point to potential upside for Google's ( GOOG ) advertising business in the fourth quarter. Analysts expect Alphabet to meet or exceed expectations, with revenue projected at $81.5 billion and earnings per share at $2.12.

Bank of America analysts highlighted that search ad pricing benefited from AI-generated overview ads, contributing to potential growth. YouTube ( GOOG ) is also expected to have gained from improved AI-driven ad targeting, while Google Cloud could see a modest upside following Microsoft Azure's weaker-than-expected results. However, they cautioned that risks are tied to foreign exchange headwinds, tougher first-quarter ad comparisons, and potential margin pressure from increased hiring or capital expenditures.

With Alphabet's new chief financial officer in place, analysts expect additional cost-cutting measures and potential new disclosures regarding capital expenditures. They also pointed to regulatory developments, including the possibility of a settlement with the Department of Justice following Judge Mehta's ruling later this year. Bank of America remains constructive on the company's long-term AI monetization potential.

At its current valuation of approximately 20 times projected 2026 GAAP earnings, analysts see the stock as attractive compared to the S&P 500. Alphabet has historically traded at a premium to the index and analysts believe that the market may be underestimating the potential for AI-driven search monetization in 2025.

GOOG Price Action: Alphabet’s shares were up 1.80% at $206.28 at the time of writing, according to Benzinga pro.

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