Clouds, Clicks, and Cash: Q2 Earnings Rollercoaster in Tech World


Big tech companies are preparing to release their Q2 earnings. The ongoing trend of remote work and the rise of digital transformation keep fuelling the need for cloud-based solutions, setting the scene for further expansion in this sector, a sector that Google are well versed in.

Investors will eagerly be awaiting any announcements related to artificial intelligence, which appears to be the main source of intrigue surrounding these stocks currently. They will be keen to understand how Alphabet plan to harness generative AI to drive additional revenue through search ad monetisation.

However, Google is set to grapple with some hurdles considering the Federal Reserve’s forthcoming verdict on interest rates. A possible increase in these rates might hamper advertising revenues, as businesses may be less inclined to allocate funds for advertising when interest rates rise. However, Google’s advancements in other sectors like cloud services and YouTube’s video streaming could compensate for any potential adverse effects.

The focus is not solely on individual companies, though. The comprehensive performance of the S&P 500 is also generating intrigue. Market analysts and investors are on high alert to assess how different sectors within the index have performed throughout Q2. The S&P 500, often considered the barometer of the U.S. stock market, can reflect wider market trends.

As major tech firms gear up to unveil their Q2 earnings, the market eagerly awaits to see how Google fares. Google’s dependence on advertising revenues and the collective performance of the S&P 500, may all play a part in shaping the market’s perception of these companies.


Chart Displaying Alphabet Inc Range Support and Resistance


If you expect Google’s earnings to cause a large move in the stock price, but you’re not sure which direction it will go, you could buy a straddle. This involves buying a call option and a put option with the same strike price and expiration date. If the stock moves significantly in either direction, one of the options could become profitable and more than offset the cost of the other leg.

ATM Straddle

buy +1 Aug 122 call @ $4.70 ($4.70 x 100 = $470)
sell +1 Aug 122 put @ $4.39 ($4.39 x 100 = $439)

Trade Idea

Long Straddle

+1 Aug 122 call @ $4.70 ($4.70 x 100 = $470)

+1 Aug 122 put @ $4.39 ($4.39 x 100 = $439)

(Total outlay $909)


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