Google’s $400 Milestone Is the AI Rally Getting Overheated?
What’s up, guys? Looking at the charts today, it’s hard to ignore the massive move Alphabet (GOOGL) is making. We’re literally watching it knock on the door of the $400 mark. But as any seasoned trader knows, when everyone starts celebrating a moon mission, it’s usually time to check the gauges.
Alphabet has been on an absolute tear, delivering over 144% in gains this past year. Currently sitting at $397.39, it's basically flirting with a new all time high.
The wild part? Even with this vertical move, the fundamentals aren't looking as bloated as you’d think. With earnings growing fast, the forward P/E is actually projected to chill out around 23x by 2028. This tells me the pump is backed by real money, not just hype.
RSI Alert
Technically, the weekly trend is looking solid, but there's a elephant in the room.
The RSI is currently hovering around 74. For the non-traders, that’s deep into overbought territory. While a stock can stay overbought for a while, the risk of a mean reversion or a quick dip is getting higher. If you're looking for a fresh entry, patience might be your best friend here.
Behind the Numbers Cloud & Gemini
Why is the market so obsessed? Two words Cloud and AI.
Google Cloud isn't just a side project anymore it’s a growth engine, up 63% recently. The narrative that AI would kill Google Search has basically been flipped on its head. Gemini AI is actually making their search more sticky and their ads more profitable.
What’s Moving the Needle?
The Gemini effect alphabet’s latest earnings showed a massive spike in revenue, largely because enterprises are flocking to their AI infrastructure.
The $185B Infrastructure play they’re doubling down. Google is allocating roughly $185 billion for AI data centers this year to make sure they stay ahead of the pack.
My take
Look, Google is a beast, and Gemini AI is the fuel. But as a trader, I hate buying at the top of a parabolic move. We’re hitting major resistance at $400 and the RSI is overheated.
If I were you, I’d keep my FOMO in check. Wait for a pullback to the support levels to get a better risk to reward ratio. The long term story is great, but don't get caught holding the bag on a temporary top.
News source:
Alfabet investor https://abc.xyz/investor/?hl=id-ID
CNBC https://www.cnbc.com/technology/?hl=id-ID
-----
This article was originally researched and written by me. To maintain transparency across Web3 platforms, please note that a version of this post was first published on my Hive blog (@rizqimaruf). You can find the original Hive post here: https://inleo.io/@rizqimaruf/alphabet-google-update-to-the-moon-or-time-for-a-dip-8dv?referral=rizqimaruf
