Google rebounds toward $300 as strong fundamentals support recovery

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Google bulls regain momentum after selloff

Wall Street sentiment improves ahead of U.S. CPI

The stock is receiving support from improving sentiment in the U.S. stock market following a massive selloff in technology companies driven by concerns about returns on artificial intelligence investments. Early in today's session, Nasdaq 100 futures gained around 0.4%, S&P 500 futures rose approximately 0.7%, and Dow Jones futures advanced about 1%.

An additional positive factor has been the decline in oil prices amid expectations of diplomatic progress in the Middle East, which could ease inflationary pressure and improve the outlook for the technology sector. However, investors remain cautious ahead of the release of October U.S. CPI data on November 10, as unexpectedly high inflation could trigger another rise in U.S. Treasury yields.

Meanwhile, GOOGL's recovery today is significantly outpacing U.S. stock index futures, potentially indicating renewed investor interest after the stock's previous excessive decline. Nevertheless, the current advance does not yet confirm a definitive reversal: following the drop from October highs above $400, the market continues to form lower highs, while many investors remain cautious about Alphabet's high capital expenditures.

Search and cloud revenue reinforce Alphabet's outlook

At the same time, the fundamental resilience of Google's core business remains an important argument in favor of buyers. In the third quarter, Google Search revenue increased by 12% to $63.3 billion, while YouTube advertising revenue grew by 9% to $11.2 billion. Google Services generated operating income of $39.2 billion with a margin of approximately 40.7%, maintaining its role as the main source of funding for new technology projects.

However, management warned that search advertising growth could face pressure in the fourth quarter due to a high comparison base from the previous year, while currency fluctuations could further limit revenue growth. Investors are particularly focused on Google's ability to maintain advertising monetization as AI search features expand, since an increase in the number of queries does not necessarily translate into proportional growth in advertising revenue.

Meanwhile, Google Cloud's 103% revenue growth to $30.7 billion confirms strong corporate demand for computing resources, while the cloud backlog reached approximately $561 billion, creating a substantial pipeline of potential future revenue.

Support at $280 opens the path toward $330

As I warned earlier, strong support around $280 managed to withstand bearish pressure, giving bulls hope that a base may be forming at current levels and that the recovery could extend toward $310–330. However, moderate selling on rallies, as noted in Google holds near $286 as bulls seek a recovery amid market uncertainty, still cannot be ruled out.

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