One of the most dominant tech companies with an enormous scope of the internet search market, Alphabet (NASDAQ:GOOG) stock continues to be a home-run holding for so many long-term investors. GOOG stock, like other tech giants, has surged to new highs. Unlike other top megacap tech companies, this company has a reasonable valuation.

With 95% of the search market, Alphabet’s business model goes well beyond Google. The company’s operational segments include the likes of Waze, Fitbit, and YouTube. And let’s not forget about the company’s Gemini model, which has driven so much of the market’s focus of late.

In recent months, Alphabet has been making movements on AI, adding more interest for investors in GOOG stock. Here’s what investors will want to look for in the company’s upcoming earnings report, and why I think GOOG stock could have more room to run following this release.

Q1 Earnings Preview and GOOG Stock

Alphabet will release its Q1 2024 report April 25, and investors are optimistic about it. The company will focus on its AI and cloud updates. Revenue is expected to reach over $78 billion, net income at $18 billion, and EPS at $1.51.

Investors closely monitored Google Cloud’s growth after a significant revenue surge in Q4 2023. The segment’s revenue rose over 25.5% to $9.2 billion, alleviating concerns about stagnation. Analysts predicted sustained growth of at least 25% throughout 2024, emphasizing improving margins.

During the earnings call, Alphabet will also give some updates on its AI ventures. Recently, the company revealed that its Google Axion Processor follows the models of other Big Tech firms. This is Alphabet’s custom Arm-based chip for data centers. 

Analysts expect AI-driven monetization opportunities across Google’s cloud, search, YouTube, and other services. Despite potential long-term competitive risks, Alphabet shares have gained over 10% in 2024.

Catalysts to Watch Out For

Analysts revised their Q4 ad revenue forecasts after inaccuracies, possibly overcorrecting to avoid overestimating. Underestimating is more forgivable, especially if trends are correct. Catalysts, like YouTube’s ad revenue, may boost the stock in the upcoming first-quarter report.

YouTube’s ad revenue rose 15.5% in Q4 2023. Nielsen reported YouTube and Netflix grew U.S. view timeshare in Q1 2024, with YouTube surpassing Netflix. Alphabet’s cloud business turned profitable in Q1 2023, becoming less risky.

Moreover, Alphabet introduced an in-house AI processor to rival Nvidia. This coincided with updates to its AI-focused personal assistant app, Gemini. Analysts expect these developments could boost Alphabet’s stock. JPMorgan predicts the new Gemini could accelerate cloud revenue growth by 20%.

Growth is Inevitable

Alphabet holds a significant position in the tech hierarchy. With a robust $1.9 trillion market cap, it sits at the fourth spot for most valuable company worldwide. 

Its success is evident in platforms like YouTube, Android, and Chrome. Its stock has soared 489% over the last decade, outperforming significant indexes.

Google dominates search with an 82% market share. It expanded into smartphones, video sharing, and cloud computing, leading digital advertising with nine platforms.

Digital ads segment will reach $740 billion in 2024 and $871 billion in 2027. Moreover, its 26% market share will position Alphabet for more stable growth.

For the past five years, Alphabet has seen over 90% revenue increase. The increases were driven mainly by its digital ad business, positioning the company to capitalize on AI. This is advantageous since the AI market will grow more in the coming years. 

Consolidating its AI teams and enhancing capabilities could benefit search engines, Google Cloud, ads, and YouTube. Alphabet’s AI strategy could elevate its business and stock price in the long term.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.