To The Moon

$Alphabet(GOOGL)$ 📉💼🧠 Google stumbles while the rest of the Mag 7 flies: is $GOOGL now a stealth buy?

I’m extremely confident that this dip in Alphabet is being wildly mispriced. While the Mag 7 surged, $GOOGL fell 1.86% to $192.91, leading losses among its peers on 31Jul25. Yet, the underlying fundamentals not only remain intact; they’re accelerating.

Alphabet just posted a stellar Q2 with 14% year-over-year revenue growth to $96.4B (vs consensus $94B). Google Search brought in $54.2B (+11.7% YoY), while total ad revenue hit $71.3B (+10.4%). Cloud impressed again with $13.6B (+32% YoY), and operating income climbed 14% to $31.3B. EPS jumped to $2.31 vs estimate of $2.19. Despite this beat, $GOOGL lagged as the market focused on near-term risks rather than execution.

I’m not ignoring those risks. Regulators ruled Google Search an illegal monopoly, and Apple is considering swapping out Google as Safari’s default engine for ChatGPT or Perplexity. Google pays $20B annually to keep that status, and if that agreement unravels, the financial and strategic impact would be significant.

But here’s the disconnect: these risks are already reflected in the valuation. $GOOGL trades at a P/E of 20.5, well below the S&P 500’s ~27.5. That discount, in my view, bakes in future search erosion and regulatory uncertainty. In contrast, Alphabet is pivoting hard into AI. Gemini AI now powers AI Overview and AI Mode in Search. Google also just committed $6B to build a 1-gigawatt data center in India, including $2B in renewables. This will be its largest project in Asia, reaffirming long-term infrastructure conviction.

Options flow supports the bearish narrative short term. On 31Jul25, GOOGL saw net drift dominated by put premium: $559.23K in less-than-90DTE puts swept aggressively while $394.20K in calls were sold off. Implied pressure weighed on price, which closed near the low of day after losing steam post-10:10 AM. Delta hedging likely exacerbated downside as price slipped from $193.80 to $192.30 by session end.

Technically, I’m watching the 4H chart compress inside the upper Keltner and Bollinger bands. Price has exited overbought territory and is testing equilibrium zones around $192. The weekly chart still shows strength: RSI(6) at 77.56, MACD ascending with histogram expanding, and candles stacking above all key moving averages (MA5: 186.17, MA10: 179.61, MA20: 169.09, MA30: 174.46). $207.05 remains the resistance pivot from April highs, with $186.17 as immediate support.

Sentiment-wise, GOOGL looks like the ugly duckling, but I see a swan beneath the surface. NatWest just announced a collaboration with Google to boost UK startups with AI tools, expanding GCP’s influence. ARM now powers nearly half of global data center CPUs, and all major hyperscalers (MSFT, AMZN, NVDA, and GOOGL) are shifting architecture around it. Google’s Capex surge is not a weakness; it’s foundational investment in AI compute, which the market is misreading.

Is the search empire under threat? Yes. But does Alphabet look like a structurally broken business? Not even close. Double-digit revenue growth, margin expansion, and aggressive infrastructure scaling all point to durable strength. Investors punishing Google for spending on the future while rewarding Meta for the same playbook reeks of short-termism.

Engagement question: Is the market unfairly discounting Alphabet’s AI pivot while overpricing the competition?

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