Google attempts to recover as AI spending and high Treasury yields weigh on shares

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Google faces resistance amid AI concerns

Earnings results raise concerns over cash flow

The main source of pressure on Alphabet remains the aftermath of its third-quarter earnings release on October 28. Revenue increased 25% to $127.6 billion, while Google Cloud revenue surged 103% to $30.7 billion. However, earnings per share came in at just $2.12, compared with market expectations of approximately $3.02. Additional concerns arose from negative free cash flow of $9.1 billion and quarterly capital expenditures of $51.4 billion.

For 2026, management maintains its capital expenditure forecast of $195–205 billion and warns of a substantial increase in 2027. Financial results were also affected by an unrealized loss of approximately $8.2 billion on its investment in SpaceX, while Google's advertising revenue fell short of expectations. For investors, the key question is no longer so much Alphabet's ability to expand its AI infrastructure, but rather how soon these investments will translate into sustainable free cash flow.

Nasdaq rebound offers relief amid Fed uncertainty

External conditions on November 11 are somewhat more favorable for Alphabet than in the previous session. Nasdaq 100 futures gained about 1.8%, while S&P 500 futures rose 0.9% following strong results from CoreWeave, which temporarily improved investor sentiment toward artificial intelligence-related companies. However, the Nasdaq lost approximately 0.7% the previous day after unexpectedly high U.S. inflation figures reinforced expectations of further monetary tightening by the Federal Reserve.

The yield on 10-year U.S. Treasuries reached approximately 5.03% on Tuesday as market participants increasingly priced in the possibility of a 50-basis-point Fed rate hike in December. For Alphabet, the combination of high interest rates and rising capital expenditures is particularly unfavorable: higher financing costs reduce the attractiveness of future cash flows, while investors become more demanding regarding the returns on large-scale technology projects.

GOOGL faces resistance at $296 as downside risks persist

At this stage, GOOGL continues to consolidate after its decline, with recovery attempts still capped by resistance around $296, while support at $280–277 continues to hold back bearish pressure. The bulls' inability to break through resistance maintains the risk of a support breakdown and a decline toward $270. A breakout above resistance, as stated in Google struggles below $300 despite new AI chip advances, would lead to a move toward $305–310.

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