Alphabet Stock Price Before Q3 Earnings: DeepMind’s Biology Bet vs. the Cloud Bill

Alphabet (Google) Stock Price Markers & Technical Performance Benchmarks

Therefore, where is GOOGL stock currently priced? Lower than the 50-day average and the 200-day average price.

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For traders, $343.31 and $353.04 are the first levels a post-earnings bounce would need to reclaim.

Based on the statistics provided by Trefis, the share price declined 21.1% between May 13 and July 23.

They then dropped another 8.5% over the two days around the second-quarter report. Analysts remain bullish; nevertheless, the price action has moved the other way since spring.

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As a result, the GOOGL stock price enters earnings in a downtrend, below key moving averages. Positioning looks less crowded than the analyst consensus suggests.

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That can make a positive surprise travel further than usual.

From Protein Folding to a Genome Atlas

Alphabet’s biology story started with AlphaFold, a system that predicted structures for more than 200 million proteins.

They both shared the 2024 Nobel Prize in Chemistry for that research. After that came AlphaFold 3 in May 2024, which is capable of modeling protein interactions with DNA, RNA, and drugs.

DeepMind then turned to the genome itself. The human body contains only around 2% of DNA coding for proteins, while the other part is responsible for the regulation of the process of gene expression.

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AlphaGenome, presented in June 2025, identifies the impact of point mutations in this DNA on gene expression.

The AlphaGenome Atlas takes that idea to the whole genome. It scores all three possible substitutions at each of roughly 3 billion positions.

A new AlphaGenome Variant Impact score then condenses each prediction into a single number.

Researchers can use it for free in noncommercial work, and DeepMind plans commercial access through Google Cloud.

Is AlphaGenome ready for clinical use? Not yet: DeepMind states plainly that the model is “not validated or approved for clinical use.”

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An outside expert told Nature that the predictions would not take the place of lab work. Put more simply, while these models reduce the hunt for drug targets, they do not reduce the trials, factories or regulators involved.

Alphabet leads AI biology on the science side. The planned Google Cloud access is the first direct revenue path, although its size is still unknown. For tonight’s report, therefore, the biology story is context rather than a price driver.

Isomorphic Labs: Where the Science Meets a Business Model

Isomorphic Labs is the vehicle meant to turn that science into medicines. DeepMind spun it out in 2021, and Hassabis serves as its chief executive. The company signed its first pharma partnerships in January 2024.

The partnership headline of about $3 billion sounds large; however, most of it is contingent on milestones.

Upfront cash totaled only $82.5 million. The trial timeline has also slipped. Isomorphic was once hoping to run AI-designed drugs in trials by the end of 2025, and its first drugs will be aimed at treating cancer.

How much is Isomorphic worth to Alphabet shareholders? Not much, at least for now. Take the high end of the reported talks, $50 billion.

That figure equals about 1.3% of Alphabet’s market value of roughly $3.8 trillion. Alphabet does not disclose its exact stake after the outside funding rounds.

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Therefore, even a successful Isomorphic barely registers against the size of Google’s core business.

Therefore, Isomorphic provides long-dated optionality. Dosing of the first candidate would prove the model right; however, it wouldn’t affect near-term earnings.

For traders, Isomorphic news is a long-term catalyst, not an earnings-week one.

The Machinery Under the Science

The biology work runs on the same foundation as Google’s commercial AI. Google holds US Patent 10,452,978, titled “Attention-based sequence transduction neural networks.

The 2017 filing relates to the Transformer model underlying current language models. A patent for Google related to decoder-only models is Patent 11,886,998, which expires in 2038.

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Google pairs that intellectual property with its own chips. Its Tensor Processing Units (TPUs) handle training and inference across Google’s services.

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In the second quarter, Alphabet recognized revenue from TPU systems delivered to customer data centers for the first time.

Meanwhile, reports in February said Meta agreed to rent TPUs through Google Cloud. Anthropic, for its part, has committed to at least five gigawatts of Google Cloud capacity.

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Google’s 2022 SIGCOMM paper reported those network savings from optical circuit switches. They show how Alphabet lowers its cost of compute.

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The same infrastructure that powers AlphaFold is also sold to rivals, and that’s where the money is today.

TPU sales turn an internal cost advantage into revenue. From this angle, they likely matter more to the stock than any drug program over the next two years.

On tonight’s call, any update on external TPU demand is the infrastructure detail most likely to register.

The Numbers That Move the GOOGL Stock Price

Alphabet’s 2025 results showed a business in strong shape. The capex line, however, nearly doubled.

Growth then picked up speed in 2026. Google Cloud revenue rose 48% in the fourth quarter of 2025. After that, growth was 63% for the first quarter and 82% for the second quarter.

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Additionally, Cloud backlog amounted to $514 billion, while the Gemini app acquired 950 million users per month.

*Calculated as reported EPS minus the gain contribution Alphabet disclosed.

Why does Alphabet’s reported EPS look so high? The short answer: paper gains. In the second quarter, gains on stakes in SpaceX and Anthropic added $6.26 per share.

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Core earnings of about $2.85 landed close to the $2.89 consensus. As a result, headline P/E ratios near 16 flatter the stock, since they count those gains. Therefore, in tonight’s print, core earnings matter more than the headline EPS figure.

Spending, on the other hand, is the bigger shift. Alphabet increased the capex outlook for 2026 to between $195 billion and $205 billion, up from between $180 billion and $190 billion.

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The total capex spent during the first half was $80.6 billion. If the guidance is met, the capex spending would be around $57 billion to $62 billion each quarter during the second half.

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Cloud growth is real and accelerating. Free cash flow, however, turned negative, and the capex guidance points to heavier second-half spending. That gap between growth and cash is what the market will price after the close.

An $80 Billion Equity Raise

The cash squeeze also explains Alphabet’s most unusual move of the year. On June 1, the company announced equity offerings of about $80 billion.

Alphabet earmarked the proceeds for AI infrastructure. About $30 billion of the at-the-market program covers 2026 employee equity tax obligations. The preferred shares convert into common stock around May 2029.

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Berkshire’s entry price offers a useful reference point. At $320.21, the Alphabet stock price sits about 9% below what Berkshire paid for Class A shares. For traders, $351.81 sits close to the 200-day average, which makes that zone a visible overhead level.

In contrast to its long history of large buybacks, the company now issues stock to fund the AI buildout.

Dilution is now part of the story. At-the-market sales were set to start in the third quarter, adding a steady supply of shares. Tonight’s report may show how much stock Alphabet has already sold.

Control, Courts and Leadership

The founders, Larry Page and Sergey Brin, had 52.7% of the total voting power on April 6, 2026. That control allows management to fund long-horizon research such as DeepMind and Isomorphic.

On the other hand, it also limits outside shareholders’ influence over capital allocation.

The board carries real biomedical depth. The director, Frances Arnold, was awarded the 2018 Nobel Prize in Chemistry.

The CFO, Anat Ashkenazi, worked for 23 years at Eli Lilly before joining Alphabet. Meanwhile, former Fed Vice Chair Roger Ferguson chairs the audit committee.

Judge Leonie Brinkema rejected the government’s demand to sell AdX. Instead, she ordered behavioral changes and a compliance monitor. 

Google plans to appeal the liability ruling. The worst-case breakup scenarios have faded; nevertheless, the search appeal keeps legal risk alive.

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In short, legal risk has shifted from structural to behavioral. The D.C. Circuit appeal remains the main open question. For the October 28 report, legal items are background risk rather than an earnings driver.

What Options Imply for October 28

Third quarter revenue estimated by InsiderFinance is $127.4 billion to $131.8 billion. The EPS estimates are between $3.04 and $3.10. The CFO has also warned that third-party capacity will pressure Cloud margins this quarter.

How much could GOOGL move after earnings? Options prices give a rough guide to the expected move, and the formula is simple:

🔗Options Expected Move Explained 

For example, for a hypothetical implied move of 5%, the amount is $320.21 * 0.05 = $16.01. The range will be between $304 and $336.

There could be changes in options pricing using live data; thus, it is advisable that you confirm the pricing before the report.

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Position size can follow the same logic. With a $100,000 account risking 1%, the amount at risk is $1,000. If the stop sits one expected move away, that equals $1,000 ÷ $16.01, or about 62 shares.

It is an editorial call rather than guidance from the company. But in either case, Cloud margins and the capex story will carry more weight than any biology story.

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The article, accordingly, becomes dependent upon cash flow. Beating revenue numbers might not be as important as the spending story for 2027.

The Risks That Matter for the Alphabet Stock Price

Each risk below can surface in tonight’s numbers or on the earnings call.

• Capex outpacing cash. Free cash flow turned negative in the second quarter.
• Dilution. The $40 billion at-the-market program adds share supply.
• Earnings quality. Paper gains on SpaceX and Anthropic swing reported EPS.
• Legal appeals. The D.C. Circuit could revive tougher search remedies.
• Supply chain. TPUs depend on TSMC manufacturing.
• Biotech timelines. Isomorphic has already pushed back its first trials.

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Closing Thoughts

Alphabet has built the most proficient AI system for biology. AlphaFold revolutionized structural biology, and the Genome Atlas can revolutionize the prioritization of disease mutations by biologists. Isomorphic Labs then gives those tools a commercial path.

None of that makes Google a pharmaceutical company yet. Isomorphic has no drug in trials, and its potential value equals about 1% of Alphabet.

The Alphabet stock price still depends on whether cloud growth can pay for a $200 billion buildout. From this perspective, the biology program looks like a long-dated option that investors receive almost for free.

Tonight’s report will show how much the core business must spend to keep it.

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NFA. DYOR. This analysis is for informational purposes only and is not investment advice.