Google recovers above $300, but resistance at $320 remains a challenge

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Google bulls face resistance near $320

Nvidia leadership change shifts attention to alternative AI chips

One of the main reasons for yesterday's gains was the unexpected resignation of Nvidia CEO Jensen Huang, which prompted a shift in capital toward companies with their own AI accelerator technologies. Nvidia shares came under heavy pressure, while investors turned their attention to Alphabet, Broadcom, and AMD as potential beneficiaries of changes in the computing hardware market.

For Google, the TPU 8tx and TPU 8i Max processor lineup introduced on November 9 is particularly significant. These chips are designed for secure computing and AI workloads involving large volumes of data. Alphabet already offers its proprietary accelerators to Google Cloud customers and for direct installation in corporate data centers.

According to the company, the number of TPU customers is approaching 100, while its partnership with Oracle provides for the deployment of these processors in Oracle's cloud infrastructure starting in 2027. Expanding sales of its own hardware opens up an additional revenue stream for Alphabet, although further commercialization of the technology will require substantial investment in manufacturing and infrastructure.

Anthropic investment expands Alphabet's AI exposure

Another important development was the disclosure of details of Google's investment agreement with Anthropic as the latter prepares for an initial public offering. According to documents filed with the U.S. regulator, Google has committed to purchasing $10 billion worth of Anthropic shares through a private placement accompanying the IPO. The total placement among strategic investors, including Microsoft, Nvidia, AMD, and other technology partners, amounts to $26 billion.

For Alphabet, the deal expands its involvement in the development of one of the leading AI model providers and strengthens its relationship with a major consumer of computing resources. However, the investment also increases the company's financial commitments and creates additional exposure to valuations in the rapidly expanding artificial intelligence market. A particularly important question is how quickly commercial revenue from cloud contracts can offset rising costs. Google Cloud's backlog of contractual commitments has already reached $561 billion, with the company expecting to recognize more than 55% of that amount as revenue over the next two years.

Bond issuance supports expansion amid high Treasury yields

Alphabet's bond offering denominated in Hong Kong and Singapore dollars, totaling approximately $3.8 billion, also attracted investor attention. The company initially planned to raise $3 billion, but strong demand allowed it to increase the size of the offering. Total investor orders exceeded $7 billion despite the recent sell-off in technology stocks.

The new bond issues provide additional financing for data center construction and equipment purchases, but also increase the company's debt burden amid high interest rates. The yield on 10-year U.S. Treasuries stands around 5.13% today, while the two-year yield is approximately 4.85%, continuing to put pressure on technology stock valuations.

Despite yesterday's relatively strong close, the current recovery still looks rather fragile. However, if the bulls establish a firm foothold above $300, they could test resistance around $310–320. As I already warned in Google attempts to recover as AI spending and high Treasury yields weigh on shares, selling pressure may emerge during the rally, and only a break above the latter level would weaken the bears' position.

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