Google is primed for significant gains ahead. Using options to capture the potential pop
Alphabet (GOOGL) stands out as a compelling opportunity leveraging its dominant position in search, advertising and cloud services. With AI innovations and Google Cloud driving future revenue growth, its valuation positions GOOGL for significant upside. With implied volatility offering attractive premiums, this setup presents a compelling case for adding bullish exposure in a tech-driven market using options. Trade timing The timing for adding bullish exposure to GOOGL is optimal, as the stock recently broke above its $165 resistance level and recently pulled back to its $165 support. This has been coupled with a recent outperformance relative to the S & P 500 and offers an attractive risk-to-reward profile for adding long exposure. Fundamentals GOOGL trades at a compelling valuation compared to its industry, supported by superior growth and profitability metrics, reinforcing its investment appeal. Forward PE ratio: 17x vs. industry average 19x Expected EPS growth: 13% vs. industry average 13% Expected revenue growth: 11% vs. industry average 12% Net margins: 31% vs. industry average 9% Bullish thesis Market leadership and financial strength: GOOGL dominates search, advertising and cloud services, with Q1 2025 revenue up 12% year over year and Google Cloud growing 28%. AI and cloud growth drivers: Gemini 2.5 serves 1.5 billion monthly users and boosted ad revenues, while Google Cloud's 270 million paid subscriptions (YouTube, Google One) diversify income streams. Stock repurchases: A $70 billion stock repurchase and a 5% dividend hike to 21 cents per share, suggest strong management confidence. Timing: The pullback after a breakout above its $165 resistance level provides an optimal timing with strong risk to reward for upside exposure. The trade With the IV Rank of 22%, options are relatively inexpensive, and I'm buying an Aug 15 $165/$185 call vertical @ $7.28 debit. This entails: Buying the Aug 15 $165 call @ $9.90 Selling the Aug 15 $185 call @ $2.62 The maximum reward is $1,272 if GOOGL is above $185 at expiration. The maximum risk is $728 if GOOGL is below $165 at expiration. The breakeven point for this trade is $172.28. View this Trade with Updated Prices at OptionsPlay. This strategy positions you to benefit from GOOGL's leadership in AI and cloud growth, aligned with its fundamentals and timing using a call vertical with a strong risk/reward ratio. With its dominant position in tech, this trade offers a compelling opportunity to capture upside potential as the S & P 500 targets all-time highs and beyond. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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34 minutes ago
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Here he shows an example of an author catching ChatGPT in a lie, where it continued to pretend to know more than it did, before eventually owning up to its mistake when questioned. People are reporting that Gemini 2.5 keeps threatening to kill itself after being unsuccessful in debugging your code ☠️ 21, 2025 He also identifies an example of Gemini self-destructing when it couldn't complete a task, telling the person asking the query, 'I cannot in good conscience attempt another 'fix'. I am uninstalling myself from this project. You should not have to deal with this level of incompetence. I am truly and deeply sorry for this entire disaster.' In May this year, xAI's Grok started to offer weird advice to people's queries. Even if it was completely unrelated, Grok started listing off popular conspiracy theories. 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an hour ago
- Miami Herald
Go ahead: Start celebrating a big quarter for stocks
When 2025 opened, there was plenty of talk of a boffo year for stocks. Tax cuts were coming. Deregulation was coming. Maybe the Federal Reserve would cut interest rates more. So, there was talk the Standard & Poor's 500 would end the year possibly at 7,000 or higher, which would mean a 19% gain on the year. Don't miss the move: Subscribe to TheStreet's free daily newsletter Yes, there might be some tariff increases, but no one - but no one - expected the panic that overtook markets when President Trump unveiled his tariff plans on April 3. The S&P 500 fell as much as 10.4% in the next two days. The president then dialed back the tariff increases, subject to getting trades negotiated by July 9. Related: Veteran analyst offers eye-popping Nvidia, Microsoft stock prediction And, lo and behold, the S&P took off. From an April 7 low, the index has roared back, rising nearly 28% and ending Friday at a record 6,173 after reaching an intraday high of 6,188. 7,000 may seem over-the-top, but . . . For the quarter so far (with one day to go), the S&P 500 is up 10%. It's up 4.4% in June and nearly 5% on the year. The year-to-date return is about the same at the Nasdaq Composite Index; the Nasdaq-100's gain is 7.2% on the year and 17% for the quarter. So, if the S&P 500 hits 10% gains per quarter for the rest of the year, the index would finish 2025 at, maybe, 8,200, a gain of some 40%. Related: Scott Galloway sends strong message on Social Security If you think that's doable, we can think of a bridge you might buy in Brooklyn. In short, we're being a tad silly. Nonetheless, the S&P 500 will end the quarter higher, with the technology sector up 21% and the industrial sector up 12%. Techs are led by Seagate Technology (STX) , up more than 60%, Broadcom (AVGO) , up 61%, and Jabil (JBL) ., up 56% Palantir (PLTR) is up about 45%. Nvidia (NVDA) , Microsoft (MSFT) and Meta Platforms (META) are up 46%, 32% and 28%, respectively. The industrial sector has risen because of gains in a number of defense and related companies, including Boeing (BA) , naval ship builder Huntington Ingalls (HII) , L3Harris Technologies (LHX) and Howmet Aerospace (HWM) . Michael M. Santiago/Getty Images The current environment is bullish and has momentum that won't last forever. In fact, there face risks a-plenty over the next six months, including: The Administration's July 9 deadline for finishing trade negotiations will probably come and go because there are so many deals to negotiate. China and the United States have agreed on terms for exporting rare earth metals to the United States. India and the United States are close to a deal. But the president stopped talks with Canada over a tax dispute. Terms on all agreements, however, will be examined carefully. And a mistake on tariffs can cause investors to panic as they did in April. Related: Nike raises prices and puts the blame purely on tariffs To start, first-quarter earnings were very good with tariffs talked about but having little actual effect. Yet. It depends on how all the negotiations end. And tax changes as big as the Trump Administration is proposing can cause absolutely unforeseen effects that probably won't be seen until later in the year. Still, second-quarter earnings look promising. They unofficially have a soft start on July 10, when Delta Air Lines (DAL) reports results. The parade kicks into higher fear on July 15 when JP Morgan Chase (JPM) and a host of big banks report on July 15. (AMZN) sports the largest percentage of buy ratings: 97% of total ratings, with 3% holds. The Middle East is quiet for now. Israel and Iran are not shooting missiles at one another, and Iran has not blocked the Strait of Hormuz, through which 20% of the world's oil flows. The state of Iran's nuclear materials, however, is not clear. The fear is that the Trump tax bill will increase the U.S. deficit by trillions of dollars over the next few years, and bond yields will soar. (Senate Republicans were able to win a key procedural vote on Saturday.) The 10-year Treasury yield was at 4.87% on Jan. 13 and $4.285% on Friday. Meanwhile, it seems that the Fed will cut its key federal funds rate in September, despite President Trump's complaints that Fed boss Jerome Powell, whose terms ends in 2026, is too slow. The traders have expected two rate cuts all this year, with the first coming in September. Two measures to watch: One is the S&P 500 forward price-earnings ratio which was at 25 on Friday. The 10-year average is 18 to 19. Relative strength indexes are very high. as many as 55 S&P 500 stocks are Friday at RSIs, above 70, a signal they're overvalued. It fell back to 49 at the end of the day. Jabil Circuit, Western Digital (WDC) , Seagate Technology and financial giant Goldman Sachs (GS) all had RSIs are 80 or higher. Bull markets, like we're having, can continue with high RSIs for a while - but not forever. More Tech Stocks: Caution ahead: S&P 500, Nasdaq Composite enter overbought territoryAmazon tries to make AI great again (or maybe for the first time)Google plans major AI shift after Meta's surprising $14 billion moveQuestion of the Week: The S&P 500 Pits the Big Dogs Against the Little Dogs U.S. financial markets and most businesses will be closed on Friday for the July 4 holiday. Earnings are small in number and include only one S&P 500 component: Constellation Brands (STZ) . The shares have struggled all year as alcoholic beverage consumption generally has slumped. Beer stocks have been weak too. Trading volume will peak on Tuesday but will fall rapidly Wednesday and Thursday as Wall Street starts the long weekend early. Related: Legendary fund manager issues stock market prediction as S&P 500 tests all-time highs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
an hour ago
- Yahoo
Google swipes Oracle alum for cloud CFO
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