- Alphabet’s Q2 2024 revenue reached $85 billion, a 14% year-over-year increase, driven by growth in Google Cloud and AI integration.
- Google Cloud revenue surged by 29% YoY to $10.35 billion, marking its first-ever $1 billion in quarterly operating income, with a margin of 11%.
- GOOG’s RSI dropped to 45, nearing oversold territory, with potential resistance at $175 and bullish solid momentum if it approaches $210.
- Alphabet’s strategic investments in AI across its services, especially Google Search and Cloud, are critical to maintaining its market dominance and future growth.
Investment Thesis
Our previous analysis two months ago for Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) included a bearish divergence warning, with an RSI fast approaching 70, signaling it was overbought. GOOG has dropped 7% since then, against our cautious view, despite the positive outlook for the long term.
However, the overall bullish thesis remains intact. The recent decline has brought the RSI down to 45, signaling that GOOG is approaching oversold territory, though not fully there yet. Ideally, a clearer oversold signal would occur around an RSI 30, which could present a more compelling buying opportunity.
As it stands, GOOG is getting closer to a potential new bull run, making it a stock to watch closely in the near term. Investors should consider this dip a potential entry point, especially if the RSI continues to decline towards more oversold levels, which would align with a more robust bullish setup.
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