Earnings Options Strategy | After Google's $400 billion bet on Anthropic, how will this week's earnings report set the tone for the AI arms race?

For global investors in the technology sector,April 29, 2026 (Eastern Time) after market close, will become a key moment determining short-term market volatility. On this day, four of the 'M7' companies (Magnificent Seven), hailed as the backbone of the US stock market, will simultaneously release their quarterly financial reports.

These four companies are: $Alphabet-A (GOOGL.US)$ 、 $Meta Platforms (META.US)$ 、 $Microsoft (MSFT.US)$ and $Amazon (AMZN.US)$ ，The combined total market cap of the four giants has approached $12 trillion.Notably, market attention on that day has gone beyond just the earnings figures themselves.This day will also see the Federal Reserve's interest rate policy announcement, with multiple critical events converging, leading analysts to call it 'one of the most important earnings days in recent years.'

In this earnings season's options strategy guide, we turn our attention to Google.

Just one week before the earnings release, Google positioned itself at the center of AI industry competition through a series of landmark actions.Last Friday, Google announced a milestone strategic investment of up to $40 billion in Anthropic, the parent company of Claude.This move is not only one of the largest investments in AI history but has also fundamentally reshaped the competitive landscape of the industry, creating two major camps led byAnthropic and OpenAI,facing off against each other.

Meanwhile, at the Google Cloud Next conference that kicked off last Wednesday,Google officially released its eighth-generation TPU specifically designed for training and inference, along with disclosing the next-generation computing power roadmap, aiming to solidify its competitiveness in AI infrastructure.

We will analyze market expectations for this earnings report, key highlights, and provide strategic insights based on technical analysis and options data.

Market consensus and core focus: The AI arms race intensifies.

Futubull's earnings preview shows that market consensus expectsrevenue to be approximately USD 106.91 billion, an increase of about 18% compared to the same period last year,although there is a seasonal decline from the previous quarter, it remains at a high level above USD 100 billion.Earnings per share are approximately USD 2.62, a decrease of about 7% year-over-year, reflecting the drag on profits from massive capital expenditures.

Behind the numbers, the market's real focus has long surpassed traditional financial metrics and shifted towards progress in AI-related fields that will determine future success.The key points of attention in this earnings report are highly concentrated in the following three areas:

(1) Growth rate of cloud business and roadmap for capital expenditure

Google Cloud is the core growth engine of the company and also the most direct channel for commercializing its AI capabilities.After successfully achieving stable profitability over the past few quarters, the market’s focus is now on whether its revenue can accelerate further.

Some institutions expect Google Cloud's year-over-year revenue growth in Q1 2026 to reach as high as 60% (the mainstream market expectation is 46.8%).Despite the heated expectations, the actual demand trend is strong enough to meet optimistic forecasts. The market previously believed that Microsoft's Azure was growing the fastest, but recent customer feedback indicates that Google Cloud is performing strongly due to its advantages in data and AI.

According to UBS Group's survey, nearly all corporate IT executives interviewed stated that their spending on Google Cloud is increasing, with a more optimistic tone than in the second half of 2025, as AI projects are directly driving cloud expenditure.The cloud business backlog at the end of Q4 2025 reached $240 billion, up 160% year-over-year.

The full-year 2026 capital expenditure guidance is expected to remain around $180 billion, with most investments concentrated in the second half of the year. Investors may focus on management’s comments regarding investment efficiency and pacing.

(2) Recovery and AI empowerment of the advertising business

As a 'cash cow,' the performance of search and YouTube advertising businesses remains a cornerstone of overall results. Whether the macroeconomic environment continues to improve will directly affect this revenue stream. More importantly, how Google deeply integrates AI into its ad products (e.g., automatically generating ad creatives, optimizing placements) to enhance advertisers’ efficiency and return on investment will be a key narrative for long-term growth.

Data source: Futubull. Data as of the 2025 annual report.

Google website traffic has improved year-over-year, but it is important to monitor whether traditional search ads remain robust in monetization amid potential changes in user behavior driven by AI-powered search (e.g., AI Overviews).

(3) A dual-pronged AI strategy: Self-developed Gemini and massive investment in Anthropic

Last Friday, Google officially announced an additional $40 billion investment in Anthropic, the parent company of Claude, ChatGPT’s strongest competitor. This monumental investment sends a clear signal:Google is not only fully advancing its self-developed Gemini ecosystem, but also using capital means to ensure it has 'double insurance' and extensive influence in the cutting-edge foundational model sector.

Anthropic is currently the fastest-growing mainstream AI company, with its annualized revenue surging from approximately 90 billion USD to over 300 billion USD in just a few months. Its product, Claude Code, dominates in programming scenarios and is a pioneer in the AI agent era, with enterprise applications continuing to expand.

Google's investment proceeds in stages: an immediate payment of 10 billion USD in cash, followed by an additional 30 billion USD upon Anthropic achieving performance milestones. Google also commits to providing Anthropic with an additional 5GW of TPU computing power over the next five years.

This investment creates a complex 'coopetition' relationship:While Gemini and Claude remain direct competitors in the product market, Google gains 'dual-track' assurance through its investment.If Gemini does not meet expectations, Google still holds significant interest in its largest competitor. Additionally, potential synergies may arise between their technologies and platforms, such as Google’s plan to distribute Claude’s API via its AI platform, enriching its own cloud service ecosystem.

After the earnings report, Google still has key catalysts ahead, including the developer conference—Google I/O 2026—scheduled for May 19-20.This conference has been officially positioned as a 'strategic launch event,' focusing on showcasing how Google’s massive capital expenditures translate into full AI ecosystem competitiveness—from underlying systems to upper-level applications, from developer tools to consumer hardware. The event is expected to unveil a new generation of models (possibly named Gemini 3.5 or Gemini 4) and release transformative tools like AI agents.

Technical Analysis & Options Strategy Deployment

$Alphabet-C (GOOG.US)$Following a period of consolidation, the stock has steadily risen since the end of March, now approaching historical highs and nearing key technical resistance levels.A successful earnings report is likely to act as a catalyst for the stock price to break through its all-time high and open up a new phase of upward momentum; conversely, if the earnings report disappoints, a pullback may occur.

From the options market perspective, the Put/Call volume ratio has remained consistently below 1 recently, indicating that most investors are optimistic about the future market. Implied volatility near the earnings report has increased somewhat, with the current IV level at 56 and the percentile at 69%, which is on the higher side but has not risen to an extreme level.

The median expectation for the stock's price fluctuation on the first trading day post-earnings report, derived from option pricing, is approximately 5.2%. Since the beginning of 2025, Google’s actual fluctuations following each earnings report have been smaller than what was anticipated by the options market.

In the context of the stock price nearing its historical high and implied volatility heating up ahead of the earnings report, the core of the options strategy lies in balancing return potential with risk exposure. Below are several approaches tailored to different market expectations for fellow investors to consider:

(1) Moderately bullish — Bull Call Spread

Suitable for investors who believe the earnings report will outperform consensus expectations, combining the long-term narrative around the I/O conference and the $40 billion investment in Anthropic to drive the stock price effectively above its historical high.

Strategy structure: Buy a call option with a lower strike price + sell a call option with a higher strike price, both with the same expiration date.

(The design images displayed on screen are for illustrative purposes only and do not constitute any investment advice or guarantees; market conditions fluctuate frequently, and the option prices shown do not represent real-world values.)

This allows for expressing a moderately bullish view at a lower cost while avoiding some risks associated with time decay and volatility contraction. The premium received from selling the option covers part of the buying cost, reducing the overall expense of purchasing a standalone call option, but also caps the profit potential.

(2) Long Volatility — Buy Straddle/Strangle

The market’s pricing of Google’s earnings volatility is relatively moderate, and the current implied volatility (IV) is not at an extreme level. If it is difficult to make a directional judgment but one believes that the market’s interpretation of key contentious issues such as full-year capital expenditure guidance could trigger volatility exceeding market expectations, consider going long on volatility.

This strategy offers profit opportunities when there is a significant expectation gap in the market (e.g., the conflict between capital expenditures and cloud revenue). If the stock price shows muted fluctuations after earnings reports, the entire premium may be lost.

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Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee for any securities, financial products, or instruments. The risk of loss in trading options can be substantial. In some cases, your losses may exceed the initial margin amount deposited. Even if you have set contingent orders, such as 'stop-loss' or 'limit' orders, they may not necessarily prevent losses. Market conditions may render these orders unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any deficit balance in your account. Therefore, before trading, you should study and understand options and carefully consider whether such trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures upon exercising options and at expiration, as well as your rights and obligations when exercising options and at expiration.

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