GOOGL traded down over 7% on Wednesday night following its softer result with the ~1.5% miss on revenue weighing on the tech giant which was testing fresh highs just 24-hours earlier. Specifically GOOGL shares tumbled around 7% after the Google-parent posted a cloud revenue miss as it ramps up spending on artificial intelligence (AI), worrying investors that the mega-cap technology company will take longer to capitalise on its AI ambitions – not the first time we’ve heard that recently. The sell-off feels overdone with operating income up +31% y/y and ahead of expectations but AI in vigour at the moment plus the “Magnificent Seven” is a crowded trade which will see momentum traders sell if weakness persists.
- The risk/reward looks appealing toward GOOGL below $US190 but we do anticipate ongoing volatility in the AI space through 2025. We own GOOGL US in the International Equities Portfolio.
MM is cautiously bullish GOOGL around $US190
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