Google faces renewed pressure as inflation weakens tech stocks

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Google tests support amid inflation pressure

Higher Treasury yields challenge Alphabet valuation

The main factor putting pressure on Alphabet was today's U.S. inflation data, which exceeded forecasts. September CPI accelerated from 3.4% to 3.7% year-over-year, compared with expectations of 3.6%, while core inflation increased from 2.4% to 2.6%.

On a monthly basis, consumer prices rose by 0.6%, with a 9.1% increase in gasoline prices making a significant contribution. Following the release, the yield on 10-year U.S. Treasuries climbed to approximately 5.29%, while the 2-year yield reached 4.91%, as investors increased their expectations of further monetary tightening by the Fed.

Against this backdrop, the Nasdaq 100 is declining by approximately 1.5%, while the S&P 500 is losing around 0.9%. For Alphabet, higher yields are particularly sensitive due to the high valuation of future cash flows associated with artificial intelligence and large-scale capital investments in infrastructure.

Gemini 4 Argon expands AI monetization opportunities

Additional investor attention was attracted by the October 13 launch of Gemini 4 Argon, Google's new artificial intelligence model focused on programming, cybersecurity, and solving complex analytical tasks. The model became available to paid Gemini subscribers and developers through the API, expanding opportunities to monetize AI products.

Today, the company also introduced additional fraud protection features in Google Messages, using cloud-based Gemini models to detect suspicious messages. However, the main question for investors remains Alphabet's ability to turn its technological advantages into sustainable profit growth.

Melius Research analysts point out that Google's massive investments could provide more predictable benefits to semiconductor and networking equipment suppliers, while the outlook for its search business remains under pressure from competition with AI platforms.

Critical price levels define near-term direction

In the near term, GOOGL's performance will be determined by a combination of macroeconomic pressure and expectations for Alphabet's financial results. Tomorrow's U.S. producer price and retail sales data could trigger additional volatility in the Nasdaq, especially if they confirm persistent inflation.

Despite the correction, Google shares appear relatively resilient compared with the broader technology sector. However, holding the $350 level is necessary for bulls to maintain control, at least in the near term. A loss of this support would lead to a decline toward $342–337, while a break above resistance at $355–357, as noted in Google consolidates near $356 as investors assess AI costs and earnings outlook, would open the way for a rise toward $365–370.

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