Alphabet Inc (GOOG)

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Alphabet (GOOGL) Stock Dips After Ad Revenue Falls Short
By: Schaeffer's Investment Research | January 31, 2024

• Alphabet beat earnings and revenue expectations

• Options traders were quick to respond

Shares of Alphabet Inc (NASDAQ:GOOGL) are pulling back sharply after the Big Tech powerhouse and Google parent's fourth-quarter earnings report. Though the company turned in better-than-expected earnings and revenue, its advertising revenue disappointed Wall Street. Plus, Alphabet and Microsoft's (MSFT) artificial intelligence (AI) cost projections are weighing on tech today.

Falling further from its Jan. 29 all-time high of $153.51, GOOGL was last seen down 5.7% at $142.82. The stock seems to be getting a little support from a familiar floor at the $152 level. Still, today's drop puts a significant dip in a once healthy year-to-date gain, with the shares now up just 1.5% in 2024.

Options traders have been quick to the trigger. So far, 115,000 calls and 73,000 puts have crossed the tape, or five times the average intraday volume. The weekly 2/2 147-strike call is leading the pack, followed by the 140-strike put from the same series, with positions being bought to open at both.

Short-term options traders are likely cheering the dip, as they've been more put-biased than usual of late. This is per GOOGL's Schaeffer's put/call open interest ratio of 1.11, which stands in the 99th percentile of annual readings.

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