What to expect when Alphabet, FANG’s ‘true blue chip,’ reports earnings

Google parent company Alphabet is set to report earnings on Thursday after the bell, and the market will be watching several key factors.

The stock has been on a tear, up 12 percent year to date and 44 percent in the last 12 months. Here's what to look for.

How's business?

Alphabet has beaten Wall Street's revenue estimates three out of the last four quarters, so top-line growth is going to be key. Remember, 85 percent of all revenue still comes from advertising, but cloud computing and hardware are now 15 percent of revenue and growing quickly.

The market will want to see how sales from home speakers fare and how well the Google Cloud Platform is doing.

Artificial intelligence impact

One thing is clear: Alphabet's big bet is on artificial intelligence.

It is, unquestionably, the best in that space. Google Assistant is the most accurate consumer product on the market, but investors will want to know how Alphabet is looking to monetize this lead.

The competition

Increasingly, it is Amazon — not Apple or Facebook — proving to be Alphabet's true competitor, particularly as Amazon moves further into the internet advertising business. It will be interesting to see how the company responds to several unexpected challenges on this front.

Overall, Alphabet is the true blue chip in the so-called "FANG" quartet of tech giants, and I expect business growth to be steady and come in within estimates. Still, increasingly, investors will focus on growth in its non-core businesses, such as hardware, cloud computing, artificial intelligence and the "internet of things" for clues as to the next stage of growth in the company.

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