Why Google might avoid an earnings 'reckoning' this week

Google's ( GOOG ) investors have a few things in their favor coming into earnings day this week that Meta ( META ) investors weren't afforded when the tech giant reported a few negative surprises .

"Google has already done some of its fundraising and indicated a 'significant' increase in capex next year when it reported Q2, so that particular reckoning may be behind it," D.A. Davidson analyst Gil Luria wrote in a note on Monday. "It is worth noting that Mr. Brin and Mr. Page moved out of California before the 1/1/26 cutoff and may be able to avoid having to sell their shares. Which means that investors will be able to focus on the Anthropic-driven growth in Google Cloud."

Meta surprised investors last week on several fronts.

The company posted negative free cash flow for the first time since 2012 amid aggressive AI spending. It signaled more aggressive spending in coming quarters.

To fund that spending, it further surprised investors by establishing a new class of nonvoting Class C common stock, which effectively serves as a 2-for-1 stock split.

Under the scheme — in part designed to keep founder and CEO Mark Zuckerberg working in California as the 5% billionaire's tax looms — existing shareholders will receive one new nonvoting Class C share for every Class A or Class B share they hold. Trading is slated to begin in January 2027.

Issuing nonvoting stock allows Zuckerberg to raise external capital for Meta's AI build-out without diluting his personal voting control over the tech giant.

Meta shares have come under pressure on fears Zuckerberg may have to sell shares to pay for his Prop 40 tax bill.

But as Luria pointed out, Google investors need not worry on this front.

Co-founder Larry Page bought two Miami estates for a combined $173.4 million, the Wall Street Journal reported earlier this year. His co-founder, Sergey Brin, moved to the Nevada side of Lake Tahoe and also bought a home in Miami this year, Fortune reported.

"We expect the company to discuss its plans to regain primacy in AI, where it is now a 2nd or 3rd place in each of the markets — 2nd in chat to ChatGPT, 3rd in enterprise to Anthropic and OpenAI, and now even trailing Meta's Muse in the personal AI assistant market," Luria wrote about Google's upcoming earnings report.

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