Analyst Explains Why He’s Bearish on Alphabet (GOOGL), Sees ‘Diminishing Returns’ in Future

Core Viewpoint - The sentiment around Alphabet Inc. (NASDAQ: GOOGL) is bearish, with analysts expressing concerns about diminishing returns and the sustainability of its AI-driven growth narrative [1][2][3] Group 1: Analyst Opinions - Don Kaufman from Theotrade has issued a bearish outlook on Alphabet, suggesting that the company's returns are expected to diminish over time due to AI threats [1][2] - Kaufman highlights that the current 30% year-to-date return for Alphabet is largely driven by AI hype, questioning the actual sources of revenue for the company [2] - Bristlemoon Global Fund believes that the bearish narrative surrounding Alphabet is overblown and has been accumulating shares since June, anticipating a market narrative shift [3] Group 2: Investment Strategies - Kaufman is implementing an options strategy involving buying 230 puts and selling 220 puts, indicating a defined risk approach with expectations of a significant decline in Alphabet's stock price over the next three months [2] - The options trade is structured as a $10-wide put spread executed for a $2.90 debit, reflecting a bearish stance on Alphabet's future performance [2]