Alphabet reclaimed its 200-day moving average in real time, then slipped off its intraday high.
The Upgrade
Phillip Securities raised Alphabet to Buy from Accumulate. Under their rating system, Buy means they now expect a return above 20%, up from the 5% to 20% range that Accumulate signals. They cut the price target slightly to 425, down from 450. The stock trades at 326, so the new target still points about $100 higher, roughly 30% upside.
The upgrade rests on strong growth across the core business. Ad revenue grew 14% year over year, helped by Gemini built into search and by making money from Shorts and connected TV. Cloud revenue jumped 82% year over year on strong demand for enterprise AI products and services. Total revenue grew 20% overall, reaching 445.87 billion over the last 12 months.
Phillip stays constructive on the long-term outlook. They say Alphabet's vertically integrated AI ecosystem should keep supporting strong growth in both ads and cloud.
Free cash flow turned negative for the first time as the company spent more on AI. This was the first negative free cash flow around earnings in more than 20 years, and it drove much of the recent pullback and scrutiny. Phillip views the cash flow pressure as temporary and as support for stronger long-term AI growth and clearer revenue visibility. They trimmed their fiscal 2026 forecasts, cutting revenue by about 2% and net income by about 4%, while noting some modest margin expansion despite ongoing supply chain constraints.
Year to date, Alphabet is up about 4%. Over the past week it is still down more than 7% even with this move up. Over the past 52 weeks it holds gains of just under 70%.
Waymo Weighs Leaving Uber
The Financial Times reports that Waymo is looking at options to split from its Uber partnership. Behind the tension are intensifying lobbying fights over the future of self-driving taxis and disagreements over state rules for those vehicles, which are pushing the two apart.
Waymo has held internal talks about ending its current deals with Uber, which runs the service in Austin and Atlanta. On Friday, Waymo already told Uber it plans to enter those two markets on its own in January 2028, using its own standalone Waymo app. Right now Waymo is only reachable through the Uber app in Austin and Atlanta, and that access stays until May of 2028. That leaves about five months where both apps operate in those cities.
Waymo also has a non-exclusive deal with Lyft in Nashville. These partnerships helped its rollouts, but none of them are exclusive. Waymo appears set to launch its own app in likely all nine cities where it operates. It also looks headed into Chicago; its cars have been spotted there and testing is expected to start over the next few months.
The Trade
Alphabet's reaction to earnings was very negative, and the stock sits at a critical point right at the 200-day simple moving average. It has rejected at that level the last two days but is now holding above it early. If it can stay near 323 to 324, I like the upside in the very near term. Anything traded here should be short-term.
The specific idea: August 7th 340 strike calls at 3.50 or lower. Set risk and a stop at 50%, so a $1.75 per contract loss is the cap. That is a small risk in this very volatile environment. The upside sits near the gap fill, which could hand you around 100% or more. I would strongly consider taking profits. This is a nail-and-bail move, with Google working toward that gap fill if it can hold above the 200-day line. It shapes up as a really important week for the hyperscalers.
On the broader market, the NASDAQ could not hold its overnight rally and dragged the S&P down with it. This is more of a relief rally pop, the kind that shows up in bearish stretches. The weakness is not broad; it is centered in tech. These are dangerous moments for bulls, who get suckered in before the market starts to leak. Until the parties actually start negotiating, it is hard to trust any move up, no matter what the news feed says.
