Google's Q1 earnings: Will Alphabet's share price collapse deepen amid tariff shock and tech slowdown?

Alphabet's stock is down 26% since December 2024. With a fragile technical setup and mounting macroeconomic headwinds, Q1 results may confirm investors' worst fears.

Market position: From leadership to uncertainty

Alphabet Inc. (GOOG) is set to report its Q1 earnings and revenue on Thursday, April 24, 2025, in what could be a decisive moment for the stock. After eight consecutive quarters of beating both EPS and revenue estimates, cracks have finally begun to emerge. Since posting a modest surprise in Q4 2024—only $0.031 above EPS expectations and a rare $230 million revenue miss—GOOG's stock has fallen over 26%, plunging from its December 2024 high of $208.70 to a pre-Easter close of $153.36.

The technical rejection at the 10-month supply zone between $163 and $169, followed by a short-lived bounce off $143, signals ongoing bearish momentum. Alphabet is now testing a crucial 8-month support band between $154 and $149, with $143 as the next downside line of defence. A break below could expose the stock to $140 and potentially $134.

Fundamental headwinds: Tariffs, AI spending cuts, and margin pressure

While GOOG's fundamentals have held up in previous quarters, the macroeconomic backdrop is deteriorating rapidly:

• US–China tech tariff war: Alphabet is among the U.S. tech giants most exposed to China's retaliatory tariffs. Although Alphabet has limited direct hardware exposure compared to Apple, its ad revenue, cloud services, and Android device licensing in China and APAC could face indirect blows. Chinese firms may opt to reduce dependence on U.S. platforms amid rising regulatory barriers.

• AI investment oversaturation: Alphabet's aggressive AI expansion—particularly in training large language models and server infrastructure—has led to ballooning capital expenditures, reportedly over $40 billion in 2024 alone. Analysts now question whether this spending is delivering sufficient monetization. With global economic growth slowing, Alphabet could face challenges converting AI hype into meaningful revenue gains in 2025.

• Digital Ad market maturity: Advertising growth, the backbone of Alphabet's earnings, is showing signs of plateauing, especially in the U.S. and Europe. Major advertisers are cutting budgets, with global marketing spending expected to decelerate to 2.1% YoY growth in 2025, the slowest pace since the pandemic recovery in 2021.

• Margin compression risk: Labor costs, data centre energy prices, and regulatory compliance have all contributed to margin compression, which is a key reason behind the modest EPS surprise in Q4 2024.

Technical outlook: Make-or-break levels into earnings

From a price structure standpoint, Alphabet remains within a well-defined 5-month descending channel. The failed breakout at $163–169 reinforced the bearish setup. At present:

• Support to watch:

  • $154: Key mid-channel level. A break likely triggers a retest of $149.

  • $143: A line in the sand—a break below opens the path to $140 and $134.

• Resistance to clear:

  • $160: First barrier to regain upside momentum.

  • $163–169: Must be reclaimed to reverse the medium-term bearish trend.

If Q1 results disappoint or forward guidance is downgraded, this structure could rapidly break down. Conversely, a strong report that beats the estimated EPS of $2.008 and revenue consensus of $89.23B may spark a short-term relief rally, especially if AI monetization or YouTube ad revenue surprises to the upside.

Looking back: Earnings consistency – But cracks forming

Past 8 quarters – EPS performance:

• Largest upside surprise: March 2024 (25.09%).
• Weakest: December 2024 (1.45%).

Past 8 quarters – Revenue performance:

• Largest beat: September 2024 ($1.88B).
• First miss in 2 years: December 2024 (–$230M).

This signals a trend reversal that may now accelerate under economic pressure.

Investor takeaway: Don't ignore the macro shift

Alphabet's Q1 report is more than a corporate update—it's a benchmark for Big Tech's resilience under mounting global stress. With equity markets increasingly sensitive to tariffs, yield curve dynamics, and rising economic fragmentation, Alphabet's results could reverberate across the Nasdaq and broader tech complex.