GOOGL Options Signal Bullish Conviction: $370 Calls Dominate as AI Capex Surge Tests $355 Support

• Alphabet (GOOGL) trades at $355.45, holding steady above key moving averages despite a slight intraday dip.
• Heavy Open Interest in $370 and $380 calls suggests traders are positioning for a breakout toward $380+ by Friday.
• A Put/Call Open Interest ratio of 0.70 indicates a distinct bullish skew in options sentiment.
• Strong Q2 earnings beat by cloud revenue is offset by concerns over $205B annual capex guidance.

It’s a strange feeling watching a stock like Alphabet hesitate right when the news is this good. You look at the price action, and it’s just… hovering. But if you peek under the hood at the options chain, the story changes completely. The market isn’t selling off; it’s betting big on a move higher. While the stock dips slightly today, the options activity tells us that smart money is positioning for an upside breakout, not a collapse. The tension here is real. On one side, you have massive capital expenditure fears. On the other, you have a technical setup and options flow that scream confidence. Let’s break down what’s actually happening.

The Options Flow: Betting on $370 and Beyond

When you look at the options chain for this Friday’s expiration, the narrative is clear. The biggest Open Interest (OI) for calls isn’t at the money; it’s out-of-the-money (OTM). We’re seeing significant volume at the $370 strike (9,477 OI), followed closely by $380 (8,787 OI) and $375 (8,447 OI). This distribution is classic bullish positioning. Traders aren’t just hoping for a small pop; they are structuring trades that pay off if GOOGL breaks out of its current range.

Conversely, the put side tells a different story. The largest put OI is at $350 (6,763 OI), with a distant tail at $155 (5,837 OI). That $155 put seems like an outlier or perhaps a typo in the raw data given the current price, but the $350 level is the real key. It acts as a psychological floor. If the stock dips, that’s where the support is expected to hold. The Total Put/Call Open Interest ratio sits at 0.70, which is comfortably below 1.0. This means there is significantly more bullish conviction (calls) than bearish hedging (puts) in the market right now.

We also see some interesting block trades. One notable entry involves GOOGL20261218P330 with 424 contracts and another involving GOOGL20260911P355 which was a sell put position. Selling puts at $355 for September suggests institutional players are comfortable owning the stock at a slight discount, effectively setting a bid under the market. It’s a subtle but strong signal that downside risk is being capped by large players.

News vs. Market Reality: The Capex Paradox

The fundamental news flow is a bit of a double-edged sword. Alphabet just reported Q2 earnings that smashed estimates, with Cloud revenue jumping 82% and EPS coming in well above consensus. That’s the good news. But the market reacted with a 7% drop. Why? Because CFO Anat Ashkenazi guided full-year capex to $205 billion. That’s a staggering amount of cash burn. The company also tapped the bond market for up to $25 billion to fund this, signaling a shift from buybacks to heavy borrowing.

However, look at the options market again. It doesn’t care about the short-term pain of negative free cash flow. It cares about the long-term dominance of AI. The heavy call buying at $370+ suggests investors believe the market is overreacting to the capex headline. They see the $240 billion in cash reserves and the Aa2 credit rating as enough buffer to weather the storm. The leadership changes at DeepMind, with Demis Hassabis stepping back to focus on AGI, are also being priced in as a strategic long-term play rather than a loss of momentum. The options market is essentially saying, "We’ll buy the dip caused by the capex fears, because we believe in the AI payoff."

Actionable Trading Opportunities

So, where do you go from here? The technicals support a bullish bias. The stock is trading above its 30-day (351.52), 100-day (350.03), and 200-day (328.62) moving averages. The MACD histogram is positive (3.73), and the RSI is at 54, which is healthy—not overbought, but gaining steam. Bollinger Bands show the price is in the lower half of the range, suggesting there’s room to expand upward toward the upper band near $382.

Here is a concrete plan for today:

• Stock Entry: Consider entering long shares near $353.78 (the intraday low) if it holds. This aligns with the $350 put support level. A stop loss could be placed just below $350.
• Target Zone: The first profit target is $365, with a secondary target at $375.
• Options Strategy (This Friday): If you want leveraged upside, look at GOOGL20260807C370. The OI is highest here, meaning high liquidity. If GOOGL breaks above $358 (intraday high), this call could see rapid gamma expansion. Alternatively, GOOGL20260807C380 offers a cheaper premium if you expect a stronger breakout.
• Options Strategy (Next Friday): For a slightly longer view, GOOGL20260814C365 has solid OI (4,397 contracts). This gives you a bit more time for the thesis to play out without the extreme theta decay of weekly options.

Volatility on the Horizon

The setup is intriguing. You have a stock that is technically sound, fundamentally strong in its core growth areas (Cloud/AI), and backed by options traders who are overwhelmingly bullish. The $350 level is the line in the sand. As long as GOOGL holds above $350, the path of least resistance is up toward $370–$380. The key is to respect the $350 support. If it breaks, the thesis changes. But for now, the options market is telling us to bet on the breakout. Keep your stops tight, watch the $350 level closely, and let the momentum carry you toward those $370 strike prices. The data suggests the bulls are in control, even if the headlines are making noise.