FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
Libertex information and reviews
HFM information and reviews

Is GOOGL breaking out?

21 November 2022

After a long and bearish year for Alphabet Inc, the GOOGL chart shows a possible reversal. Is it just a brief resistance along the downward trend, or is there something substantial behind the bullish price move? 2022 saw a drop in Alphabet’s performance, as well as the stock prices. GOOGL fell from a healthy $148 (USD) to the current $98. But this week we saw the shapings of a reversal, which means attention is growing and perhaps sentiment too. Year-over-year, revenue increased by 6% to $69 billion, despite YouTube’s 2% drop to $7 billion. Profit suffered the most, coming in at $17 billion, a decline from last year of 27%. When overall revenue is up but profits are significantly down, cost is usually the culprit, and Alphabet is spending money like there’s no tomorrow.

In less than a year, Alphabet has hired 37,000+ people, raising the worldwide employee number to 186,779 people as of 2022-Q3. That’s a 25% increase in just one year. But why? Since Google has already achieved world dominance, what more are they cooking up that would require such an increase?

Investors are unhappy and already calling for a staff cut, and there’s a good chance that it’s just around the corner. Big companies parallel a practice that’s common for professional bodybuilders. The idea is to bulk up, get big, then cut the fat. It’s not unusual for a company to bloat the workforce, then remove the dead weight, effectively refreshing the workplace while keeping the pillar resources. If Alphabet is in the bulking up phase right now, we might expect them to cut the fat when the economy hits a low point. No better time to reduce costs. Which brings us to another point.

Is GOOGL breaking out?

A coming recession has been the theme of 2022, and yet here we are in Q4 and still no crash. And, Alphabet is expanding its workforce like never before. Does this mean Alphabet believes the recession isn’t close? Given the trillions of data points that Google can access and analyze, you would assume it was in a position to forecast a downtrend. But how would a recession affect Alphabet?

Google advertising in decline

Alphabet, Inc relies on Google advertising for revenue. In fact, ads alone account for 80% of Alphabet’s revenue. But this means Google is not recession-proof. When any company’s profit and performance struggles due to external factors, such as an economic downturn, the first thing to cut is usually the advertising budget. Marketing costs are a quick and easy option to reduce when cash flow is in question, and they are easy to switch back on. If every company scales back on its ad budget all at once, ad bid prices become much cheaper, and Google Ad revenue falls. 

Worldwide, ad budgets have been falling over 2022, which surely contributed to Google’s profit deficit. If a downturn appears, global marketing spend will take a dive and Google will feel it.

Should you trade GOOGL?

If the bullish run continues, traders might not want to buy in at the mid-price. If a drawback comes in the next few weeks, that might be a good entry point. The real question is, what is Alphabet planning? If the massive hiring is for something top secret, the reveal will probably send GOOGL to the moon. If there’s no master plan, mass staff dismissals will appease the investors, reduce costs, and fuel positive sentiment, which will likely help GOOGL.

The last thing to think about is Alphabet as a global entity embedded in our society. Alphabet has the fourth largest market cap at $1.275 trillion. It has a firm grip on the world’s internet usage and exposure, and nothing has changed on planet Earth that would threaten the future of Google.

Unlike Zuckerberg and Musk, Larry Page and Sundar Pichai are not getting attacked about questionable business practices – at the moment. There’s a long list of reasons why GOOGL will be around for the foreseeable future, and most likely as strong or stronger than it is today. Trading GOOGL is not a complicated decision to make, but the timing is. Watch GOOGL like a hawk and see if the bullish trend makes a drawback.


Share: Tweet this or Share on Facebook


Santa Rally: Your Christmas Gift From The Stock Market
Santa Rally: Your Christmas Gift From The Stock Market

Christmas is a religious holiday that has evolved into a cultural and commercial celebration with tales of Santa Claus delivering presents on a reindeer-pulled sleigh through the night sky...

7 Dec 2022

Citigroup heading for UAE
Citigroup heading for UAE

One of the largest and most famous banks in the world is Citigroup, headquartered in New York City… at least, for now. There have been some employee movements...

6 Dec 2022

XAU/USD upside appears more compelling ahead of US NFP
XAU/USD upside appears more compelling ahead of US NFP

Gold price consolidates recent gains around four-month high after crossing the key resistances. Cautious mood, US Dollar rebound allows XAU/USD bulls to take a breather...

2 Dec 2022

Oil’s correction in rumors about further production cuts by OPEC
Oil’s correction in rumors about further production cuts by OPEC

The price of Crude oil resumed the downward movement after failing to cross above the daily trendline which was valid since late June.The price only rebounded to the upside...

1 Dec 2022

The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

30 Nov 2022

Is Boeing stock about to take off?
Is Boeing stock about to take off?

Boeing stock (BA) has been in free fall since March 2021, from $269 (USD) dropping to $121 at the end of September 2022. And then came a reversal, raising prices to over $175...

29 Nov 2022

Editors' Picks

FXCM information and reviews
ActivTrades information and reviews
RoboForex information and reviews
MultiBank Group information and reviews
MultiBank Group
FxPro information and reviews
Vantage information and reviews

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.