Alphabet Shares Slide as Traders Rush to Secure Profits Amid Earnings Miss

Steve Grasso, CEO of Grasso Global and a veteran trader with three decades of experience on the New York Stock Exchange, says Alphabet investors are rushing for the exits to lock in any remaining gains. He notes that the stock’s moving averages have converged this week ahead of Wednesday’s poor earnings report. “If you look at the chart, all these moving averages are stacked on top of each other,” Grasso said. “What does that tell you? It tells you that the stock has done nothing for a year, and everyone has the same cost basis.” Cost basis is the average price a trader paid for a stock, and chart analysts use moving averages to identify key levels where many investors bought shares. “So everyone’s looking to get out at the same price, and that price is now,” he added. Alphabet shares were set to open 11% lower on Thursday after reporting worse‑than‑expected earnings, revenue and capital‑expenditure spending in the prior quarter. The company also posted a negative free cash flow of $9.07 billion. “The second quarter was the first time they went free cash flow negative until this quarter. So now we have a pattern. The market pays for cash, not investment,” Grasso said. He added that Apple now appears to be the safety stock, while Google (Alphabet) is no longer seen as a defensive choice.

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