Alphabet Inc. is the most vulnerable Big Tech company on the regulatory front, but don’t expect that to matter when the search giant reports second-quarter financial results Tuesday.

The leading digital advertising company and Google


parent company faces at least five government antitrust lawsuits, primarily for its dominance in the search market. And that dominance, to no one’s surprise, makes it the top vendor in the multibillion-dollar online ad market.

Read more: Google is in the hottest antitrust seat, but Apple and the rest of Big Tech shouldn’t breathe easy

The latter is proving more important to investors, as the stock closed at a record high on Thursday, then gained again Friday morning after Snap Inc.

and Twitter Inc.

reported quarterly spikes in online-ad sales, a market dominated by Google and Facebook Inc.

Don’t miss: More on Twitter earnings and Snap earnings

Following blistering digital travel ad sales from Snap, Morgan Stanley analyst Brian Nowak noted that Google is a dominant player in that $10 billion market segment, which should augur well for Google when it reports.

Cowen analyst John Blackledge estimates Google Search and other revenue will jump 56% year-over-year in fiscal 2021, a beneficiary from ad market recovery, cloud momentum, a bump in e-commerce and a recovering travel market.

“We expect strong growth as post-pandemic reopening continues,” Blackledge said in a July 14 note that raised Google’s price target to $2,900 from $2,700 while maintaining an outperform rating.

Blackledge is among 45 analysts polled by FactSet who, on average, have a buy rating and price target of $2,809 for Alphabet shares. They’re generally not swayed by a raft of regulatory issues, which goes beyond the five federal and state antitrust lawsuits against the search giant.

Opinion: Who’s more anticompetitive — Alphabet or Apple?

On Tuesday, President Joe Biden nominated Google antagonist Jonathan Kanter to head the Justice Department’s antitrust division. Kanter has represented companies such as Microsoft Corp.

and Yelp Corp.

that have pushed enforcers to sue the search giant. Kanter joins a daunting team that also includes Federal Trade Commission chief Lina Khan and Tim Wu, the antitrust architect for the Biden administration who is an outspoken critic of Big Tech.

See also: New FTC chair Lina Khan is Big Tech’s biggest nightmare

And regulatory worries don’t end within the U.S. Google has racked up $9.72 billion in European Union antitrust fines tied to price-comparison shopping cases and two other cases involving its Android and search businesses in the last decade. On Nov. 10, a European court is scheduled to rule on Google’s challenge against a $2.8 billion European Union antitrust fine, according to a Reuters report Tuesday.

What to expect

Earnings: Analysts on average expect Google to report earnings of $19.24 a share, up from $10.13 a share a year ago. Analysts were projecting $15.46 a share at the end of March.

Contributors to Estimize — a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others — project earnings of $19.12 a share on average.

Revenue: Analysts on average expect Google to report $56.2 billion in second-quarter revenue. Traffic-acquisition costs are estimated at about $10 billion, which would give Alphabet revenue of $46.18 billion when extracted; by that standard, Alphabet reported sales of $38.3 billion a year ago.

Estimize contributors expect revenue of $46.18 billion after removing traffic-acquisition costs.

Stock movement: Google shares have hurdled 47% this year, closing at a record $2,568.43 on Thursday. The S&P 500 index SPX has increased 16% in 2021.

What analysts are saying

Google may be encircled by regulators across the U.S. and Europe, but analysts and investors hardly seem to care.

“We favor Google and Snap headed into the print among our digital advertiser coverage,” Wedbush Securities said in a July 19 note to clients, summarizing the sentiment among financial analysts.

If anything, Google’s sway in retail is growing despite regulatory exposure, according to Morgan Stanley analyst Brian Nowak. In a July 19 note that assigns a price target of $3,060 for Google shares, Nowak cites survey data that 54% of retailers ranked Google Search including YouTube as “their first place to go to research products online, up from 50% in past surveys.”

Still, the apparition of antitrust action — however slow developing in Congress and the courts — will weigh in the future on Google and its Big Tech brethren.

“While generally a breakup of a major tech company within the next five years is
not expected, heightened industry scrutiny is likely to pause mergers that could be in the ‘gray area’ and change the economics around market concentration that could favor spinoffs from large established firms,” Raymond James analyst Ed Mills wrote in a July 14 note to clients.

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