Alphabet drops below moving averages as Sundar Pichai highlights Gemini 3.5 Transcribe

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Alphabet Slides 1.58% Today

Highlights

Shares of GOOGL trade at $341.47, below key short- and medium-term moving averages but above long-term support.
Mixed momentum indicators and recent 1.58% decline show near-term downward bias, with neutral strength and no clear oversold signal.
Price is expected to consolidate between $334.00 and $355.00 over five days, with a high probability of sideways to higher movement barring a break of $334.00.

AI upgrade’s growth potential faded by near-term cash and buyback concerns

Sundar Pichai announced the launch of Gemini 3.5 Transcribe, an AI-powered API for advanced multi-speaker and multilingual speech recognition, available via @GoogleAIStudio and Gemini. This product strengthens GOOGL's leadership in AI and has potential to boost demand and future revenue, but the market is currently discounting this positive due to more immediate concerns over elevated capital expenditures and a pause in buybacks. Meanwhile, strong Q2 2026 results highlighted surging revenue and cloud growth, though the company's negative quarterly free cash flow and redirection of capital toward large-scale AI infrastructure have tempered investor enthusiasm. Alphabet’s recent dividend and bond raise further underscore an aggressive reinvestment strategy.

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But we saved everything 🙂.

Short-term downside signaled as GOOGL falls below key averages

GOOGL is trading below its 20-day ($349.41) and 50-day ($351.55) moving averages, while still holding above the 200-day ($333.35), showing short- and medium-term downside but long-term support. Nearest support lies at $333.35, with resistance at $349.69. The MACD and RSI both signal a sell bias, reinforcing the prevailing bearish tone in the short run, and the expected five-day trading range is $334.00 – $355.00. The tweet's underlying optimism is not reflected in current price action, so this divergence adds caution to the short-term forecast.

Jainam Mehta, market strategist, is circumspect regarding Sundar Pichai’s announcement of Gemini 3.5 Transcribe, viewing such technological advances as insufficient against wider macroeconomic and capital allocation headwinds. He notes that despite Alphabet’s innovation and strong global AI positioning, heightened capital expenditures and capital redeployment are overriding market enthusiasm, further pressured by today’s drop below key moving averages. "AI launches are headline-worthy, but with cash outflows and a reversal in buybacks, the global investment environment is far from convinced — caution is warranted."

Earlier, analysts noted that Nvidia's earnings would serve as a bellwether for the ongoing expansion in artificial intelligence and its effects on the broader tech sector. This article adds a new dimension by examining Alphabet's current positioning amid evolving AI infrastructure demands, with the prevailing scenario suggesting investors should monitor Alphabet's capability to leverage AI advancements to drive its business segments.

Source of Data: GOOGL Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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