GOOGL Gains Premarket As Tech Selloff Eases: Alphabet Preps Second Euro Bond This Year

• Alphabet reported disappointing third-quarter results driven by weak revenue in core search advertising and a surge in AI-related cash burn, which overshadowed a doubling of its cloud unit sales. 
• Alphabet raised 9 billion euro ($10 billion) across six tranches in May.
• Retail sentiment for GOOGL was ‘extremely bullish.’ 

Alphabet, Inc. (GOOGL) shares rose 1% in premarket trading on Monday amid a relief recovery in tech stocks after a brutal week and disappointing earnings.

Bloomberg reported on Monday that the Search giant is set to offer euro bonds for the second time this year to raise funds for its AI infrastructure buildout.

Read Next

Bitcoin Bulls See Light At The End Of The Correction As Michaël Van de Poppe Says Midterm Elections Are 'Priced In'

Anushka Basu

The seven-part sale spans maturities from two to 19 years, with the 19-year notes offered at about 205 to 210 basis points over mid-swaps, the news agency reported, citing a person familiar with the matter.

Alphabet raised 9 billion euro ($10 billion) across six tranches in May. Barclays Plc, BNP Paribas SA and Deutsche Bank AG are arranging the offering, which is expected to price later in the day, according to the report.

Last week, Bank of America guided investors toward mega-cap technology bonds, instead of their stocks as an investment opportunity. Michael Hartnett, chief investment strategist at BofA, noted that fixed-income instruments issued by the "Magnificent Seven" and other major tech players provide compelling value.

Alphabet’s Q3 Recap

Alphabet reported disappointing third-quarter results driven by weak revenue in core search advertising and a surge in AI-related cash burn, which overshadowed a doubling of its cloud unit sales. 

“Google Search & other” revenue slowed, growing at 12% to $63.3 billion, compared to the 17% growth pace in the preceding second quarter. Alphabet spent $51.36 billion in capital expenditure and said its 2027 figure would be higher than this year’s.

Chief Business Officer Philipp Schindler attributed the slowdown to foreign exchange rates and one-off dips in advertising spending in Asia-Pacific among advertisers affected by the EU’s elimination of its de minimis exemption. He also added that Q2 had been unusually strong due to advertising linked to the FIFA World Cup.

Retail View On GOOGL

On Stocktwits, the retail sentiment for GOOGL was ‘extremely bullish’ even as investors turned focus on results from Apple, due later in the day.

“$GOOGL should see a rebound this week. While free cash flow gets headwinds, its diversified revenue streams continue to grow impressively like the cloud computing with over 100% growth to $31 billion in quarterly revenue,” said a trader.

Year to date, GOOGL stock is now down 10.4%. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: Apple And Palantir To Kick Off Tech Earnings In Another Crucial Week, AMD To Settle Chip Debate After Intel’s Warning