Alphabet ’s shares are up nearly 70% this year, hitting a record high this week — even Berkshire Hathaway has taken a stake.
The past 12 months’ surge will be hard to replicate, but solid business fundamentals could still drive the stock higher. The question now is: what should investors do with this stock?
Alphabet’s AI Chips and Gemini Model Position It as a Serious Nvidia Rival
A powerful rally in Alphabet shares is reshaping the league table of the world’s most valuable companies, as signs emerge that the search giant is gaining real traction in its bid to challenge Nvidia Corp.’s dominance in AI accelerators.
Reports that Meta is in talks to purchase billions of dollars’ worth of Alphabet’s specialized AI chips have fueled speculation that Google’s parent may soon erode Nvidia’s commanding market share. The combination of strong demand for Alphabet’s tensor processing units (TPUs) and glowing reviews for its new Gemini AI model is prompting investors to rethink the tech landscape — and the potential shift in stock-market leadership.
Morgan Stanley Quantifies Alphabet’s Chip Opportunity
According to The Information, Meta Platforms Inc. is discussing the use of Google’s TPUs in its data centers starting in 2027, and may even rent chips from Google Cloud as early as next year.
Morgan Stanley on Wednesday added fuel to the debate, calling Alphabet’s chip ambitions one of Wall Street’s hottest storylines. By 2027, it’s “not unreasonable” to project Alphabet shipping 500,000 to 1,000,000 TPUs, analysts led by Brian Nowak wrote.
Nvidia currently controls roughly 90% of the AI-chip market, based on third-party industry data. But if Meta begins adopting Alphabet’s specialized chips — as recent reporting suggests — that could meaningfully dent Nvidia’s share. Such a shift could drive upgrades to Alphabet’s earnings forecasts, propelling its stock higher and pushing the company’s market value toward the $4 trillion mark.
Options Strategies
Below are several options strategies to consider, depending on whether you hold a bullish or bearish outlook on Alphabet stock.
Bullish Strategies
(If you believe Alphabet’s stock will continue to rise.)
1. Bull Put Spread
When to Use: Neutral to mildly bullish — suitable for traders confident GOOGL will stay above $300. Generates income from premium collection.
Structure:
Sell 1 × Dec 12 put @ $300
Buy 1 × Dec 12 put @ $290
$GOOGL Vertical 251212 290.0P/300.0P$
Max Profit: $120 (est.)
Max Loss: -$880 (est.)
Breakeven(Expiry): $298.80
Estimated Margin: $1,000
Source: Tiger Trade App
Notes: A bull put spread caps the maximum loss to the net premium paid for the structure. If Alphabet trades below $300 before expiration, the short put can be assigned early. So this strategy is appropriate if you are willing to buy the Alphabet stock below $300.
2. Bull Call Spread
When to Use:
Moderately bullish outlook — expecting further upside but wanting to cap risk and reduce cost.
Structure:
Buy 1 × Dec 12 call @ $320
Sell 1 × Dec 12 call @ $340
$GOOGL Vertical 251212 320.0C/340.0C$
Max Profit: $1,338
Max Loss: -$662
Breakeven: $326.62
Source: Tiger Trade App
Notes:
A strong near-term rally is needed; otherwise, time decay (Theta) will erode value.
Strategy benefits from rising implied volatility (IV) but suffers from low liquidity or falling IV.
Bearish Strategies
(If you believe Alphabet's stock will drop)
3. Bear Put Spread
When to Use: Moderately bearish outlook — expecting a pullback while limiting downside risk.
Structure:
Buy one $320 put (Dec 12 expiry)
Sell one $310 put (same expiry)
$GOOGL Vertical 251212 310.0P/320.0P$
Max Profit: $606
Max Loss: -$394 (Est.)
Breakeven: $316.06
Source: Tiger Trade App
Pros: Generates income in a flat-to-weak market; defined risk.
Cons: Losses start if GOOGL exceeds $318; limited profit potential.
Disclaimer: Options involve significant risk and are not suitable for all investors. Traders should assess their risk tolerance and investment objectives before entering any positions.
$(GOOG)$ $(GOOGL)$
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