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Alphabet (GOOGL) shares rise amid buoyant market, trailing behind competitors
By: Investing | October 9, 2023
Monday saw Alphabet Inc. Cl A (NASDAQ:GOOGL) shares rise by 0.61% to $138.42, marking a second day of gains in an overall buoyant stock market. This performance was amidst the S&P 500 Index and Dow Jones Industrial Average also climbing by 0.63% and 0.59% respectively.
However, Alphabet's performance was mixed when compared to its competitors. Microsoft Corp . (NASDAQ:NASDAQ:MSFT) surged by 0.78%, closing at $329.82, while Amazon.com Inc. (NASDAQ:NASDAQ:AMZN) saw an increase of 0.23% to close at $128.26. Meta Platforms Inc (NASDAQ:META). (NASDAQ:FB), formerly known as Facebook, ended the trading day at $318.36, with a rise of 0.93%.
Despite the slight uptick, Alphabet's closing price was still $0.74 below its 52-week high from September 18th, 2023. The trading volume for Alphabet on Monday was recorded at 19.2 million, falling roughly 5.9 million short of its average trading volume.
The recent market trends reflect a positive investor sentiment as major tech stocks continue to show gains in the current trading environment.
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Alphabet (GOOGL) Shrinks Recruiting Team Following Large-Scale Layoffs
By: Investing | October 9, 2023
In a recent development, Alphabet (NASDAQ:GOOGL) has significantly reduced the size of its recruiting team. This move has led many employees affected by the decision to share their experiences on LinkedIn. Despite Alphabet's assertion that these were not large-scale layoffs, the company has pledged to assist those affected in finding new roles.
An employee, who had planned to retire at Google, was among those dismissed just before his paternity leave. Despite his unexpected dismissal, he praised Google as a "magical place with remarkable people" and expressed his willingness to return if an opportunity presents itself.
This development is part of a series of staff reductions at Alphabet. Earlier this year, Google, an Alphabet subsidiary, embarked on large-scale layoffs in January that resulted in 12,000 employees losing their jobs. In addition to these layoffs, workers from the Waze mapping app department were let go as part of its integration into Google Maps.
Amid these changes, Alphabet has maintained a strong market presence. According to InvestingPro data, the company's Market Cap stands at a robust 1720.0B USD, with a P/E Ratio of 29.24 and a Revenue of 289.53B USD as of the second quarter of 2023. These metrics speak volumes about the company's financial health and its ability to generate profits.
In addition to these metrics, Alphabet has also demonstrated a high return on assets, as indicated by InvestingPro. This suggests that the company has been efficient in using its resources to generate profits. Alphabet's stockholders have also seen high returns on book equity, further underscoring the company's financial strength.
On the other hand, Alphabet's revenue growth has been slowing down recently, as per InvestingPro Tips. This could be a concern for investors, especially in light of the recent layoffs. However, Alphabet remains a prominent player in the Interactive Media and services industry, and its stocks are trading near their 52-week high. This information, coupled with the company's strong return over the past three months, indicates that Alphabet continues to be a profitable investment opportunity.
For more in-depth insights and tips on investing in Alphabet, consider exploring the InvestingPro product that includes additional tips. The product lists 18 tips for Alphabet, providing a comprehensive guide for potential investors.
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Broadcom retains Google as key customer despite rumors of parting ways
By: Investing.com | October 2, 2023
Despite recent rumors suggesting that Alphabet's (NASDAQ: NASDAQ:GOOGL) (NASDAQ: GOOG) lead business unit Google was considering parting ways with semiconductor giant Broadcom (NASDAQ: NASDAQ:AVGO), a Google spokesperson confirmed on Monday that its engagement with Broadcom remains unchanged, labeling Broadcom as an "excellent partner."
The rumor mill, despite its uncertainty, has shed light on the long-queried identity of Broadcom's significant "computing offload customer." While it was widely speculated to be a tech titan, likely Google, this recent internal source seemingly confirms it.
Broadcom's custom silicon projects, also known as application-specific integrated circuits (ASICs), have been a subject of interest since 2022. The company categorized its ASIC revenue into two segments: routing and switching, and compute offload. Compute offload is a two-step process within a data center. Initially, routers and switches decide which part of the data center will handle the computing request. Processors then make the computations, which are subsequently sent back to the end user through the internet or private network by those same routers and switches.
With the confirmation that Google is Broadcom's significant ASIC customer, it's clear that Broadcom plays a crucial role in helping engineer Google's Tensor Processing Units (TPUs)—custom processors for specific AI workloads—as well as routers and switches for Google's extensive global data center fleet.
In the spring of 2022, Broadcom revealed that its ASIC business had generated nearly $800 million in 2021 for routing and switching, and nearly $1.6 billion from compute offload. These sectors had been growing at an average annual rate of 20%. Assuming this growth rate continued and that Google is the sole ASIC customer (which is likely not the case), Google could represent upwards of $3 billion in revenue for Broadcom in 2023, or nearly 10% of total annual sales.
Even though Google has debunked the rumors of parting ways with Broadcom, other ASIC companies such as Marvell (NASDAQ:MRVL) Technology Group, a smaller competitor to Broadcom also riding the AI wave with its own routing and switching chip, would likely be interested in this business opportunity.
Earlier this year, similar rumors suggested that Apple (NASDAQ:AAPL) was nearing the end of its relationship with Broadcom for 5G wireless and Wi-Fi chips. However, a few months later, Apple renewed its multibillion-dollar supply agreement with Broadcom for another couple of years. The secret to Broadcom's retention of these tech giants lies in its chip designs, extensive patent library, and some proprietary in-house manufacturing capabilities.
Despite the rumors of Google trying to save a couple of billion dollars a year, it is well-positioned to continue paying Broadcom for its assistance in compute offload chips while simultaneously growing its profitability from digital ads and Google Cloud.
Broadcom's integral role in the technology sector continues to be highlighted through its partnerships with tech giants like Apple and Google.
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Donaldson Capital Management LLC Lowers Position in Alphabet Inc. (GOOGL)
By: MarketBeat | September 29, 2023
• Donaldson Capital Management LLC trimmed its position in shares of Alphabet Inc. (NASDAQ:GOOGL) by 4.9% during the second quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 69,241 shares of the information services provider's stock after selling 3,579 shares during the quarter. Donaldson Capital Management LLC's holdings in Alphabet were worth $8,288,000 as of its most recent filing with the Securities and Exchange Commission (SEC)...
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Google $GOOG closed below weekly wedge support + first bearish MACD cross this year.
By: TrendSpider | October 1, 2023
• $GOOG Google closed below weekly wedge support + first bearish MACD cross this year.
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Alphabet Inc. $GOOGL Ugly day Friday, but r/s overall, filled it's gap and still in the upper channel.. possible H&S forming 126.6 neckline....
By: Options Mike | September 30, 2023
• $GOOGL Ugly day Friday, but r/s overall, filled it's gap and still in the upper channel.. possible H&S forming 126.6 neckline....
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Tesla created secret team to suppress thousands of driving range complaints https://www.reuters.com/investigates/special-report/tesla-batteries-range/ $GOOG
Alphabet Stock Holds Up Well - Ideal for Short Put Traders
By: Barchart | September 26, 2023
Alphabet (GOOG) stock has held up well during the latest stock market selloff. This bodes well for out-of-the-money short sellers of its put options, who make income selling near-term puts for income. In early trading on Tuesday, Sept. 26, GOOG stock is just below $130 per share.
This is only about 5% below where it was on Sept. 8, when I last wrote about GOOG stock. The stock was at $136.99 when I wrote the Barchart article, “Alphabet Stock Is Still Cheap, Especially for Short Sellers of Its Puts.”
I had suggested that shorting the $130 strike price put options for expiration on Sept. 29 would be worth the 83 cents premium that could be made by selling those puts. Today, those puts trade for just below that original premium.
Selling More OTM GOOG Puts
Although this is a net zero profit or even a slight loss, it might make sense to roll this over to a new expiration period. The key is to pick out-of-the-money (OTM) strike prices that might not get exercised.
For example, for the Oct. 13 expiration period, which is 17 days from now, the $123.00 strike price put option still trades for 90 cents. That can provide a short-seller a 0.73% yield (i.e., $0.90/$123.00).
GOOG Puts expiring Oct. 13 - Barchart - As of Sept. 26
Moreover, if this trade can be repeated every 3 weeks for a year, the investor can make an expected return of over 12.4%. That is because there are 17 periods of 3 weeks in a year.
Now, obviously, this is a theoretical return, and sometimes the options will be exercised, which can potentially cause an unrealized loss. That happens when the investor's put option strike price is higher than the spot price and the put gets exercised. In this case, the investor has to purchase the stock at the strike price and there is an unrealized loss on the trade.
For example, in this week's Sept. 29 expiration period, if GOOG stock stays below $130, the investor will have to purchase the stock at $130.
Shorting OTM GOOG Calls
Nevertheless, the investor can turn around and sell short OTM call options in this situation. That could help ameliorate the unrealized loss.
For example, for the same Oct. 13 expiration period, the $135 strike price call options trade for $1.30 per contract. That strike price is 3.54% OTM and provides a covered call yield of 1.01% over today's spot price (i.e. $1.30/128.56).
GOOG Calls - expiring Oct. 13 - Barchart - As of Sept. 26
This means that if an investor gets their $130 short puts exercised they can turn around and sell one call option contract for expiration on Oct. 13 and receive $1.30.
That covers most of the unrealized loss from the short-put trade. And don't forget that the investor also kept the original premium received from selling short the OTM puts.
This shows that given the relatively modest movements of GOOG stock, options traders can trade around the volatility of the stock and make good income.
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Alphabet $GOOG Gap magnet initiated
By: TrendSpider | September 26, 2023
• $GOOG Gap magnet initiated.
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Alphabet Inc. $GOOGL Leader finally capitulated. 50D holding so far, if not 128 then that gap.. Gap above now if we bounce
By: Options Mike | September 24, 2023
• $GOOGL Leader finally capitulated. 50D holding so far, if not 128 then that gap..
Gap above now if we bounce.
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Here's how Google $GOOGL makes its money
By: Savvy Trader | September 21, 2023
• Here's how Google $GOOGL makes its money.
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$GOOG When the market leaders start getting wacked, it definitely raises some red flags.
By: TrendSpider | September 21, 2023
• $GOOG When the market leaders start getting wacked, it definitely raises some red flags.
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$TSLA & $GOOG $1+ Million Put Sellers. A lot of profit-takers after the move down today
By: Cheddar Flow | September 21, 2023
• $TSLA & $GOOG $1M+ Put Sellers
A lot of profit-takers after the move down today
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Alphabet $GOOG ready for a pullback after an epic bull run?
By: TrendSpider | September 20, 2023
• $GOOG Google ready for a pullback after an epic bull run?
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Google's $GOOGL stock performance each full year since going public
By: Evan | September 17, 2023
• Google's $GOOGL stock performance each full year since going public
2005: +115.2%
2006: +11%
2007: +50.2%
2008: -55.5%
2009: +101.5%
2010: -4.2%
2011: +8.7%
2012: +9.5%
2013: +58.4%
2014: -5.6%
2015: +46.6%
2016: +1.9%
2017: +32.9%
2018: -0.8%
2019: +28.2%
2020: +30.9%
2021: +65.3%
2022: -39.1%
2023*: +55.7% (So far)
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Alphabet $GOOGL hit new 52 week highs today
By: Evan | September 14, 2023
• Google $GOOGL hit new 52 week highs today.
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Alphabet Inc. $GOOGL r/s Not far from 52W high and leading. 138 next resistance then we see
By: Options Mike | September 9, 2023
• $GOOGL r/s Not far from 52W high and leading. 138 next resistance then we see.
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$GOOG There is no stopping this train
By: TrendSpider | September 9, 2023
• $GOOG There is no stopping this train.
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Alphabet (GOOG) Stock Is Still Cheap, Especially for Short Sellers of Its Puts
By: Barchart | September 8, 2023
Despite the tech sell-off, Alphabet (GOOG) stock has held up well recently. In early trading on Friday, Sept. 8, GOOG stock is at $136.92. Moreover, its valuation metrics are still inexpensive. That makes it ideal for short sellers of out-of-the-money puts as an income play.
I discussed why GOOG stock is cheap in my last Barchart article on Aug. 22, “Alphabet Stock Holds Up and Attracts Value Investors and Short-Put Traders.” At the time, GOOG stock was at $130.67. Those arguments are still valid and I believe the stock remains cheap for value investors.
For example, GOOG stock is still trading for just 24 times forward earnings for 2023 and 20x for 2024. This is below is historical 25x average multiple according to Morningstar.
Moreover, most analysts have higher price targets for GOOG stock, according to Yahoo! Finance.
Shorting OTM Puts
In that article, I suggested shorting the out-of-the-money (OTM) puts at the $126 strike price for expiration on Sept. 15. Given that the expiration period was three weeks away the $1.82 premium received for shorting selling those puts was well worth the investment.
This play has proven successful as today those puts are now trading for just 7 cents. In other words, most of the money from shorting those puts has been made. It makes sense now to roll this trade over and short a new expiration period three weeks from now.
For example, the Sept. 29 expiration option chain shows that the $132 puts have an attractive $1.21 premium. That means that the short seller can make an immediate yield of 0.917% (i.e., $1.21/$132.00).
Rolling The OTM Short Put Play Over
However, for some investors the $132.00 strike price may not be conservative enough - it may have too much risk. It is only 3.61% below today's spot price.
Therefore, they may want to short the $130 strike price. This is almost 5% out-of-the-money (OTM) and provides much better risk, in case GOOG stock were to fall from here over the next three weeks.
GOOG Puts - Expiring 9-29-23 - Barchart - As of Sept. 8, 2023
As can be seen above the premium for the $130 strike price is 83 cents and the strike price is over 5% below today's spot price. That provides a good yield of 0.638% and good downside protection.
Moreover, even if this trade is repeated every three weeks at this same price, the return is acceptable. This is because there are 17 periods of 3 weeks in a year. So 17 x 0.638% equals 7.66% on an annualized basis.
That is significantly higher than the stock's existing dividend yield, which is zero. Alphabet still does not pay a dividend. Therefore, for shareholders who own GOOG shares, it makes sense to sell short OTM puts to gain extra income.
The bottom line here is that GOOG stock is still cheap and shorting OTM puts is a good way to play this along with owning the shares.
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$GOOG Google running into some trouble at wedge resistance + RSI made yet another lower high...
By: TrendSpider | September 6, 2023
• $GOOG Google running into some trouble at wedge resistance + RSI made yet another lower high...
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Alphabet Inc. $GOOGL 52W high this week, but couldn't really break out yet
By: Options Mike | September 4, 2023
• $GOOGL 52W high this week, but couldn't really break out yet.
See if the 8D holds now.
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$GOOG UO bubble chart for Google currently shows overwhelmingly call heavy flow through July of next year
By: TrendSpider | September 1, 2023
• $GOOG UO bubble chart for Google currently shows overwhelmingly call heavy flow through July of next year.
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Alphabet (GOOGL): One Chart Explains the Mega-Rally
By: Lucas Downey | August 30, 2023
• Alphabet Inc. (GOOGL) shares have jumped 52% in 2023. This uptrend is being powered by mega appetite for the stock.
Alphabet Attracts Big Money Inflows
Want an edge in trading? Follow the Big Money.
What’s Big Money? Said simply, it’s when a stock rises due to institutional demand. Top stocks tend to attract savvy investors.
You see, fund managers are always looking to bet on the next outperforming stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.
The YTD action tells the story. Each green bar signals unusual buying volumes in GOOGL shares, pushing the stock higher:
Source: www.mapsignals.com
Few stocks have charts this strong. Recent green bars suggest healthy demand. But, what about the fundamental story?
Alphabet Fundamental Analysis
Next, I want to make sure the fundamental story is healthy too. As you can see, GOOGL has had positive sales and EPS growth in recent years:
• 3-year sales growth rate (+21.1%)
• 3-year EPS growth rate (+30.8%)
The company is also expected to grow EPS 18.2% this year.
Source: FactSet
Marrying great fundamentals with our proprietary Big Money software has found some big winning stocks over the long-term.
Check this out. Alphabet has been a top-rated stock at MAPsignals. That means the stock has had buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.
It’s made the rare Top 20 report numerous times. The blue bars below shows when GOOGL was a top pick:
Source: www.mapsignals.com
Tracking unusual volumes reveals the power of the MAPsignals process.
Alphabet Price Prediction
The GOOGL rally has been in place for years. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.
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Google $GOOG unable to break through wedge resistance today, meanwhile negative RSI divergence continues to build...
By: TrendSpider | August 29, 2023
• $GOOG Google unable to break through wedge resistance today, meanwhile negative RSI divergence continues to build...
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$GOOGL Not sure what else I can add here ~ they have pounded this one for the last 2 days! Larger size DP this evening ~ 1.9 mil shares at $134.57
By: FLOWrensics | August 29, 2023
• $GOOGL Not sure what else I can add here ~ they have pounded this one for the last 2 days! Larger size DP this evening ~ 1.9 mil shares at $134.57
GOOGLE CLOUD NEXT 23 kicked off today & continues through 8/31. A ton of flow to reference (just search the feed)
*Worth noting add'l featured speakers at this event should $NVDA $PANW $DDOG $W $WEN $APP $WDAY $ACN $GTLB $CME $SABR $DLTR $CTSH $KDP
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News out today EV Car maker $GOEV Canoo selects Google Cloud technologies to maximize its data
https://www.prnewswire.com/news-releases/canoo-selects-google-cloud-technologies-to-maximize-its-data-301912043.html $GOOG $GOOGL
$GOOGL 09/29/23 $142C OI now at 18.8K vs 211 yest. They are also coming in to the 09/29 $143C today
By: FLOWrensics | August 29, 2023
$GOOGL 09/29/23 $142C OI now at 18.8K vs 211 yest
— StockNanny (@StockNannyApp) August 29, 2023
They are also coming in to the 09/29 $143C today https://t.co/QeSrxQGAR5 pic.twitter.com/MyiFx0LpcT
$GOOG Round 3?
By: TrendSpider | August 29, 2023
$GOOG Round 3? 🧐 pic.twitter.com/UXKaL1oxZe
— TrendSpider (@TrendSpider) August 29, 2023
Google’s $GOOGL new A3 GPU supercomputer with Nvidia $NVDA H100 GPUs will be generally available next month
By: Evan | August 29, 2023
Google’s $GOOGL new A3 GPU supercomputer with Nvidia $NVDA H100 GPUs will be generally available next month - Tech Crunch pic.twitter.com/9iITZ4C1x1
— Evan (@StockMKTNewz) August 29, 2023
Google unveils enterprise AI tools, new AI chip
By: Investing.com | August 29, 2023
SAN FRANCISCO (Reuters) - Google unveiled a swath of fresh artificial-intelligence technology and partnerships on Tuesday that were geared toward bringing more of the growing technology to large businesses.
The batch of announcements from its Google Next conference in San Francisco included new customers for its cloud software such as General Motors (NYSE:GM) and Estee Lauder Companies (NYSE:EL).
The Alphabet (NASDAQ:GOOGL) subsidiary made public a new version of its custom-built AI chips, unveiled an enterprise-scale tool to watermark and identify images generated with AI - plus tools for security and its office suite.
The flurry of announcements is part of Google's recent effort to showcase its AI plans, after Microsoft (NASDAQ:MSFT) caught the company off guard with an ambitious AI strategy it has been rolling out since last year.
But its big business customers need to be deliberate and move at a different pace, Google Cloud chief Thomas Kurian said in an interview with Reuters.
"We've generally told enterprise customers, 'Go slowly and methodically because it's important that you treat this as a strategic software development,'" he said. "There's been this sort of FOMO of, 'I need to be in generative AI for generative AI's sake.'"
FOMO refers to fear of missing out, a common refrain in AI in recent months.
To bolster Google's enterprise cloud service it added 20 AI models to its collection, bringing the total to 100. The AI infrastructure includes deals to bring Google Cloud customers access to Meta Platforms (NASDAQ:META)' AI model LLaMa 2, and to the startup Anthropic's Claude 2.
Google announced new versions of its own foundation AI infrastructure that improve performance and add features. The new version of its text model called PaLM, for example, increased the amount of text users can input to make it easier to process longer documents such as legal briefs and books.
Google discussed a tool that adds the capability to watermark AI-generated images. Called SynthID, the technology alters a digital image file in a way invisible to human eyes. It is designed to remain intact after an image is altered or tampered with.
Google also rolled out AI updates to its suite of office software and security tools. The company unveiled an AI-powered tool that can port databases from Oracle (NYSE:ORCL) to an open-source version, a notoriously difficult task.
CUSTOM AI CHIPS
Ahead of the announcement of its full-fledged fifth-generation tensor processing unit (TPU), Google has opened access to a version that is optimized for genAI and large language models.
The new chip, called TPU v5e, is designed to train large models but also efficiently serve content from those models. It is not as powerful as the as yet unlaunched flagship fifth AI generation chip.
Google has stitched together the TPU v5e chips into batches of 256 that it describes as a "supercomputer." Cloud customers can connect several pods together in order to tackle more complex computing problems.
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Alphabet $GOOGL Sweepers aggressive out of the gate into the 09/29/23 $142 CALLS
By: FLOWrensics | August 28, 2023
• $GOOGL Sweepers aggressive out of the gate into the 09/29/23 $142 CALLS
Google Cloud Next 23 kicks off tomorrow 08/29 to 08/31.
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Alphabet Inc. $GOOGL 52W high on Thursday but couldn't hold. That said still showing r/s and holding most of the earnings gap
By: Options Mike | August 27, 2023
• $GOOGL 52W high on Thursday but couldn't hold. That said still showing r/s and holding most of the earnings gap.
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It is apparent that the majority of "investors" in the larger market never checks or even looks at what "Google (is) doing what leaders do". These very quick whipsaw actions in share prices have become normalized for many quality stocks. Uncertainty and impatience and knee-jerk reaction is ruling the day. C'est :La Vie. GLTA
$GOOG Google doing what leaders do
By: TrendSpider | August 23, 2023
• $GOOG Google doing what leaders do.
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Google $GOOG hit new 52 week highs earlier today
By: Evan | August 23, 2023
• Google $GOOG hit new 52 week highs earlier today.
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Double Top Breakout today on 23-Aug-2023
Entered a day order to buy at $133 GLTA
PS: Day order filled at $133.00
Will the relative strength continue for Google? Seasonality suggests it might... Since IPO in 2004 September: 63% win rate, +2.50% average return, October: 74% win rate, +9.34% average return
By: TrendSpider | August 22, 2023
• $GOOGL Will the relative strength continue for Google? Seasonality suggests it might...
Since IPO in 2004
September: 63% win rate, +2.50% average return
October: 74% win rate, +9.34% average return
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Google $GOOG just flagging near 52-week highs waiting for the rest of the market to get with the program.
By: TrendSpider | August 22, 2023
• $GOOG Google just flagging near 52-week highs waiting for the rest of the market to get with the program.
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Alphabet (GOOG) Stock Holds Up And Attracts Value Investors And Short-Put Traders
By: Barchart | August 22, 2023
Alphabet (GOOG) has dropped just 1.83% in the August sell-off and it's now moving back up. In morning trading on Aug. 22, GOOG stock is at $130.67, down from $133.11 at the end of July. Alphabet's massive free cash flow (FCF) makes it attractive to value investors.
It also appeals to options traders who sell short out-of-the-money (OTM) put options for income.
I discussed these points in my July 30 Barchart article, “Alphabet Gushes Forth Record Free Cash Flow, Making GOOG Stock Cheap.” The article pointed out that Alphabet's Q2 results showed that its FCF was up 73% YoY.
Moreover, its QoQ FCF growth was over 26%. That is incredible. It helps explain why GOOG stock has performed reasonably well during the past month, despite the tech stock sell-off.
Where This Leaves Investors In GOOG Stock
As it stands, GOOG stock trades on a very reasonable forward price-to-earnings (P/E) multiple of just 23x for 2023 and 19.5x for the year ending Dec. 2024. That is well below its 5-year average forward P/E multiple of 25.1x, according to Morningstar.com.
So, if GOOG stock were to rise to its average forward multiple, GOOG stock would be worth 9.1% more using 2023 metrics (i.e., 25.1x/23x) and 28.7% more based on 2024 (i.e., 25.1x/19.5x).
That implies GOOG stock is worth between $142.56 per share and $168.17. That puts its average target price at $155.36 per share. That is slightly higher than Yahoo! Finance's survey of 10 analysts who have an average price target of $142.30 per share.
However, our own FCF analysis, in our prior article, shows that GOOG stock could be worth as much as $217.88 per share.
The bottom line is that using either a P/E metric formula or a FCF formula it clearly looks like GOOG stock is worth much more than today's price. That makes it attractive to value investors who own GOOG stock for the long term.
One way to conservatively play this upside in the near term is to sell short out-of-the-money (OTM) put options. This helps lower buy-in costs if the puts are exercised as well as to gain extra income.
After all, Alphabet still does not pay a dividend. So, by both holding GOOG stock and shorting OTM puts, investors can gain the best of both worlds: GOOG stock's upside potential as well as current income.
Shorting OTM Puts
For example, in our last article, we discussed selling short the Aug. 25 expiration $130 strike price. At the time, on July 30, the premium received from this trade was $2.76 per put option sold short. Today, those puts are lower at $1.19. So, that trade has been successful.
It might make sense to roll this trade over and short it again for a further expiration period. That involves buying back the shorted put option (i.e., “Buy to Close”) and then entering another order to “Sell to Open” a new put trade.
For example, the Sept. 15 expiration put option chain, a little over 3 weeks from now, shows that the $126 puts trade for $1.81 per contract. That means that the short seller gains an income of 1.44% at a strike price which is 3.50% below today's price.
GOOG Puts - Expiring Sept. 15 - Barchart - As of Aug. 22, 2023
This means that a trader who secures $12,600 in cash and/or margin with their brokerage firm can enter an order to “Sell to Open” 1 put at $126.00 for Sept. 15 expiration. The account will immediately receive $181.00 in it. That shows that there is an immediate yield of 1.44% (i.e., $181/$12,600).
This shows that investors can conservatively play the upside in GOOG stock today. This strategy works best when an investor both owns the stock and also shorts OTM puts. Even if the stock price falls to $126.00 or lower on or before Sept. 15, the investor can potentially lower their buy-in cost.
In addition, they still get to keep the income that was generating selling the OTM puts. This makes this kind of trade profitable, especially if it is repeated continuously.
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$GOOGL $91 Million at $130.54 #PhantomPrint ~ SPOT $128.24
By: FLOWrensics | August 21, 2023
• $GOOGL #PhantomPrint at $130.54 ~ SPOT $128.24
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Alphabet Inc. $GOOGL Finally found it's way into it's earnings gap, but not going easily. 50 then gap fill next support, 132 Wall for now
By: Options Mike | August 20, 2023
• $GOOGL Finally found it's way into it's earnings gap, but not going easily.
50 then gap fill next support, 132 Wall for now.
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Google vs the DoJ is a test case for reining in Big Tech
By: Financial Times | August 17, 2023
When the US Department of Justice’s complaint against Google goes to trial next month, it will be the first case to delve into the business practices of a big tech company since the US took on Microsoft a quarter of a century ago. If Judge Amit Mehta comes down on the side of the US, the remedies he orders could have a direct bearing on Google’s core business, opening the door for rivals to take a bigger slice of the mobile search market.
You wouldn’t know it from the share price. Alphabet, Google’s parent, is up 47 per cent this year, part of a powerful rally that has seen Big Tech lead the entire stock market higher. Ever since the “techlash” that set in around 2017, when politicians and regulators around the world began to look at reining in the power of the biggest tech companies, investors have had a new risk to handicap. The current stock market mood suggests they see very little danger.
It is easy to see why. Despite the sound and fury emanating from Washington in recent years, regulators have yet to score any big antitrust wins against the tech companies and Congress has failed to advance any important new legislation. And despite levying a series of fines against Google, Brussels has done little to change competitive dynamics in the markets it dominates.
The EU’s new Digital Markets Act may present a bigger risk. But in the absence of new laws in the US, regulators there have been forced to try to stretch existing ones. The courts, though, are wary of limiting business practices that confer immediate consumer benefits, such as lower prices. Tech companies are quick to warn that messing with their current way of doing business could threaten free internet services and low-price digital goods that have been popular with millions of consumers.
The US Federal Trade Commission‘s failure last month to convince a judge to block Microsoft’s $75bn acquisition of gaming company Activision Blizzard has again underlined the unwillingness of US courts to act without clear harm to consumers, however much the companies’ competitors complain.
The case against Google turns on a batch of deals the company struck with handset and browser makers to make its search engine the default on devices and handsets that run its Android software.
Though some parts of the complaint were thrown out by Mehta this month, the trial will focus on an issue where Google could be vulnerable. Section two of the Sherman Act imposes a broad ban on any “exclusionary conduct” used to monopolise a market. The US succeeded with a similar complaint against Microsoft, which used exclusive contracts to promote use of its Internet Explorer browser and defeat browser maker Netscape.
But even if Google’s search deals shut out competitors, the company would still prevail if it can show pro-competitive intent for its conduct. Google argues that paying to make its search engine the default that users see on their devices is no different from the way makers of breakfast cereals pay for prominent placement on supermarket shelves. It also warns that if its own promotional deals are cut off and the courts prevent a normal business practice, then it could lead to a worse experience for consumers, including higher phone prices.
The legal test comes just as another big tech company appears set to face a complaint over its core business. There have been reports for weeks that the FTC is moving closer to filing a long-awaited lawsuit against Amazon’s ecommerce operations. The agency is said to be targeting Amazon’s treatment of the third-party sellers who use its online marketplace to reach customers. Amazon has long faced protests that it effectively forces these sellers to pay for extra services, such as its Fulfilment by Amazon storage and delivery, to ensure their products are given prominent placement in its marketplace.
As with Google, this appears to attack an important part of the core business. Independent sellers like this account for nearly a quarter of Amazon’s revenue, making this an important part of the company’s business. Yet Wall Street seems untroubled and Amazon’s shares have rebounded 57 per cent this year.
One calculation investors seem to be making is that even if the companies lose, they may be able to resolve the cases by adjusting the terms of some of their contracts rather than being forced into fundamental changes to their operations. Amazon, for instance, has already agreed to concessions in the EU and UK over how it deals with third-party sellers, with little impact to its business.
The Google trial will shine a light on the sort of practices that Big Tech’s critics claim have complained about for years. But if Wall Street is right, it won’t put a dent in the companies’ most profitable operations.
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$GOOG Hard to ignore the relative strength from Google today, if mega-cap tech can catch a bid look for this name to lead!
By: TrendSpider | August 17, 2023
• $GOOG Hard to ignore the relative strength from Google today, if mega-cap tech can catch a bid look for this name to lead!
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Alphabet $GOOGL Bearish Risk Reversal
By: FLOWrensics | August 15, 2023
• $GOOGL Bearish Risk Reversal
OPENING the 12/15 $130 PUTS
WRITING the 12/15 $130 CALLS
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