Alphabet (GOOG) Options Signal Bullish Bias: Target $340 Calls as AI Momentum Fueled by Q3 Earnings Outperforms Bearish Risks

• Current Price Drop: GOOG trades at $316.3 (-1.46% from previous close), with intraday volume surging to 4.12M shares.
• Options Imbalance: Call open interest (1.15M) outpaces puts (868K), with 0.75 put/call ratio favoring bullish positioning.
• Key Levels: Bollinger Bands show $272.68 (lower) and $339.79 (upper), while RSI at 69.78 hints near-overbought territory.

The stock is caught in a tug-of-war between AI-driven optimism and regulatory headwinds—but options data leans decisively bullish.Bullish Sentiment in Options: Calls Outmuscle Puts at Key Strikes

The options market is painting a clear picture: traders are betting on a rebound. For this Friday’s expirations, the $340 call (GOOG20251212C340) leads with 17,389 open contracts, followed by $330 (8,207) and $320 (7,823). These strikes cluster just above the 30D moving average ($298.59), suggesting a target for short-term breakouts. Meanwhile, puts are concentrated at $285 (10,192 OI) and $295 (8,487), indicating a fear of a deeper pullback below $300.

The block trades in older expirations (e.g., GOOG20250919C235 with $1.14M turnover) hint at institutional activity, though their expiration dates limit immediate impact. What’s telling is the $335 call (GOOG20251219C335) leading next Friday’s chain with 8,170 OI—positioning for a potential rebound above current levels.

News Flow: AI Wins vs. Regulatory Risks

Alphabet’s Q3 earnings beat ($102.35B revenue) and Piper Sandler’s $365 price target upgrade are fueling call buying. The AI partnership with the UK government and YouTube TV’s 2026 bundling strategy reinforce long-term optimism. Yet the EU’s looming $10B fine and Waymo’s 3,067-vehicle recall introduce near-term jitters. The market’s reaction? Bullish options activity dominates, as investors price in management’s ability to mitigate these risks through AI infrastructure growth and cloud dominance.

Actionable Trade Ideas: Calls for Leverage, Puts for Hedging

• Options Play: Buy GOOG20251219C330 (next Friday’s $330 call) if GOOG holds above $315. The strike sits at a psychological level between the 30D ($298.59) and 200D ($208.56) averages. A close above $325 would validate the bullish case, with $340 as a profit target.
• Stock Entry: Consider buying GOOG near $315 if it holds above the 30D moving average. Set a stop-loss below $300 (lower Bollinger Band) to manage risk from the EU fine or Waymo fallout.
• Hedge Strategy: Sell GOOG20251219P295 (next Friday’s $295 put) to offset downside risk. The $295 level is a key support zone with 8,487 OI, offering a buffer if the stock dips toward $285.

Volatility on the Horizon: Balancing AI Optimism and Operational Risks

Alphabet’s stock is poised for a volatile December. The options data and technicals suggest a high-probability rebound if AI-driven cloud growth and YouTube TV’s 2026 strategy gain traction. However, the EU fine and Waymo’s recall could trigger a pullback to $285–$295. Traders should monitor the RSI (69.78) and MACD histogram (-0.73) for early signs of exhaustion. For now, the call-heavy positioning and Piper Sandler’s $365 target make a bullish bias justified—but not without caution.

Final Take: The market is pricing in a $340+ move by year-end, driven by AI and cloud momentum. But don’t ignore the puts at $285. Position with calls for upside, and use puts to hedge the inevitable wobbles. This is a stock that rewards patience—and punishes complacency.