Alphabet: Time to Take Profits, Buy, or Wait for a Pullback?

Core Insights - Alphabet has experienced a significant stock rebound, rising 76% from its 52-week low and over 30% year-to-date, following a period of underperformance compared to tech peers [1][2] - The company's valuation gap has closed due to strong Q2 earnings and a shift in market sentiment, alleviating previous concerns over regulatory risks and competition [3] Valuation and Market Sentiment - Alphabet was trading at historically low earnings multiples, presenting a buying opportunity for long-term investors [2] - The stock's recent re-rating reflects renewed investor confidence, driven by improved earnings and a more favorable narrative [3] Technical Analysis - Current technical indicators suggest the stock may be overheated, with the Relative Strength Index (RSI) above 70, indicating overbought conditions [4] - A typical cooling-off period may be expected, suggesting that current levels may not be the best entry point for new investments [5] Support Levels - The $210–$200 zone is identified as a long-term support area, while the $230 level is noted as a key point for potential buyers to monitor [6][7] Fundamental Strength - Despite technical concerns, Alphabet's core businesses, including search and advertising, continue to show steady growth [8] - The launch of "Waymo for Business" indicates Alphabet's strategic push into corporate demand for autonomous technology, potentially unlocking new revenue streams [9] Cloud Strategy - Google Cloud is focusing on nurturing the next generation of companies rather than competing for mega-deals, positioning itself to capture future growth [10] - The "no compromise" AI stack offered by Google Cloud is designed to provide flexibility and performance, enhancing customer loyalty [11]