The firm is bullish on the company's search budget growth and the overall pace of innovation, singling out Alphabet's work on projects like machine learning and doubling of the daily cap for small Adwords accounts as revenue drivers.
The one area that concerns Barclays analysts is the company's traffic acquisition costs. The firm expects Alphabet to exceed Barclays own fourth-quarter $2.7 billion traffic acquisition price tag and to continue to grow at an accelerating rate over last year.
Barclays believes Google will outperform its non-GAAP EBIT estimate of $11.8 billion, which translates to a margin of 45.9%, and an overall GAAP EPS of $9.59 for Alphabet.
FactSet has a consensus non-GAAP EPS estimate of $10.02 per share once Alphabet releases its financials on Jan. 25.
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