Google stock recovers as AI growth offsets regulatory risk
GOOGL is trading around $349 on September 30 after recovering from the $338–340 area. On the hourly chart, the stock has moved back above some of the short-term moving averages, but for now it remains within the fairly wide range that formed after the August correction.
286.30
326.23
Softer inflation improves macro backdrop
Today’s U.S. macro data were able to provide some support for Alphabet. August PCE rose 0.3% m/m, the annual rate slowed to 3.4%, while Core PCE came in at 3.0% y/y, below expectations. The U.S. economy remains relatively resilient: second-quarter GDP growth was revised upward to an annualized 2.2%, while ADP showed private-sector employment growth of 90,000.
For GOOGL, the combination of softer inflation and resilient economic growth is important in two ways: it reduces pressure from high yields on technology stock valuations while also supporting the digital advertising market.
Cloud momentum keeps AI story intact
Within Alphabet itself, two factors are affecting the stock’s performance. On the one hand, AI is already starting to work not only as an investment story, but also as a real driver of the ecosystem. AI Mode continues to expand within Search, Gemini’s audience is growing, and Google Cloud is maintaining a strong pace thanks to demand for AI infrastructure.
In the second quarter, Cloud grew 82%, while its backlog exceeded $500 billion, so investors continue to see a rare combination of a strong advertising business and a rapidly growing cloud segment.
EU scrutiny adds pressure near resistance
On the other hand, regulatory risk is becoming more visible again. Google is challenging EU requirements that would involve sharing some search data with competitors and giving third-party AI services broader access to Android. For Alphabet, this is potentially more sensitive than a conventional fine because it affects the advantages of the Search, Android and Gemini ecosystem itself.
For now, the market is taking this risk without panic, and technically a move back above $350 could open the way toward resistance around $358–360. A lack of progress from bulls at current levels, as I noted in Google struggles below $350 as TPU monetization becomes the next growth test, could provide a reason for profit-taking on long positions, leading to a break below support around $340 and a decline toward $330–320.
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