In another one of this week’s tests of investor sentiment around artificial intelligence (AI) – and a tentpole one at that — Google’s parent company, Alphabet (NASDAQ: GOOGL), reports second-quarter results after the close of U.S. markets on Wednesday, July 22.
This report could be an opportune time for short-term traders to consider Alphabet single-stock ETFs, such as the Direxion Daily GOOGL Bull 2X Shares (GGLL ) and the Direxion Daily GOOGL Bear 1X Shares (GGLS ). When preparing for Alphabet’s earnings with these funds, traders should note that GGLL attempts to deliver 200% of the daily returns of the internet stock, while the bearish GGLS seeks intraday performances corresponding with the inverse returns of Alphabet.
Although shares of Alphabet are up 12% year to date, they have slipped 3% over the past month — perhaps signaling a near-term burden of proof for the company as it heads into its earnings report. If that’s accurate, either GGLL or GGLS could be worth considering.
“Look for Google Cloud growth in both quarterly numbers and contracted future revenue (or backlog),” noted Malik Khan of Morningstar. “We think investors want certainty that the $460 billion backlog will convert to sales over the next two years, and also want to know what that trajectory will look like. Non-backlog factors, such as consumption-based spending and new commitments, will be important for understanding the health of the cloud business.”
More Alphabet Angles
Without the benefit of a crystal ball, it’s difficult to determine which of the Direxion ETFs will come into focus following Alphabet’s earnings report. However, identifying the catalysts that could move the stock and these ETFs is relatively easy. That list starts with planned expenditures, particularly those related to AI.
“The firm should be at the top end of its $180 billion-$190 billion annual capital expenditure guidance. We think investors will key in on the annual capital expenditure for 2026, as well as any implied numbers it may provide for 2027 and their associated impacts on earnings,” added Khan.
For traders looking to approach Alphabet in bullish fashion, potentially deploying GGLL in the process, it’s worth noting that some market observers believe the stock remains one of the more attractively valued names in the mega-cap growth space.
“We see the stock as cheap and expect investors to appreciate the firm’s multi-vector monetization opportunity in AI throughout the year,” concluded Khan. “While there are concerns about Gemini falling behind at the frontier, we think Alphabet remains competitively well-positioned in the model layer and across the entire AI stack (chips, cloud infrastructure, and applications). We believe Alphabet can find monetization opportunities across its businesses, leveraging AI.”
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