To The Moon

Alphabet fell more than 12% in one day, and several technology heavyweights are 20%-30% below their 2026 closing highs. That has brought the familiar buying-the-dip question back into focus.

Tiger's view: It is reasonable to start screening profitable companies after these pullbacks, but there is not enough evidence to declare a bottom across technology stocks. Prices, earnings and cash flow need to be assessed together—and historical recoveries show why the time horizon matters.

01 | Stock-level selloffs and index drawdowns differ

On October 29, the Nasdaq Composite closed at 26,184.72, down 1.38%. The Nasdaq-100 fell 1.38%, while the S&P 500 lost 0.30%. GOOGL dropped 12.64%, Amazon fell 4.25%, Microsoft slipped just 0.16%, and Meta rose 1.96%. The performance was sharply divided. [1][2]

The Nasdaq-100 was 5.84% below its October 6 closing high and still up 16.45% year to date. Larger losses in individual stocks do not establish that the whole sector has entered a deep bear market. [1]

These are drawdowns from each instrument's highest 2026 closing price. They are different from year-to-date returns and do not measure a discount to fair value.

02 | Alphabet: Strong cloud growth, with securities losses affecting net income

Alphabet's Q3 revenue rose 25% to $127.577 billion, operating income grew 30% to $40.576 billion, and Google Cloud revenue increased 103% to $30.709 billion. Those figures provide evidence of cloud and AI demand. [3]

Net income available to common shareholders fell to $26.170 billion, with diluted EPS of $2.12. The company disclosed that equity-securities losses reduced net income by about $6.7 billion after tax and EPS by approximately $0.55. Operating performance and investment gains or losses need to be read separately. [3]

03 | Cash flow: Growth also demands more capital

Alphabet generated $42.290 billion of operating cash flow in Q3 and spent $51.355 billion on capital expenditures. Its defined free cash flow was an outflow of $9.065 billion. Trailing twelve-month free cash flow remained positive at $19.747 billion; the quarterly outflow should not be presented as a full-year outflow. [3]

The questions are whether cloud growth can continue, when new computing capacity can generate enough income to cover its investment, and how long the cash-flow pressure will last.

04 | Microsoft: Earnings and investment are both growing

Microsoft's fiscal 2027 first-quarter revenue grew 19%, operating income rose 21%, and Azure revenue increased 48%. Operating cash flow was $58 billion, while cash additions to property and equipment were $39.367 billion. [4]

Subtracting the latter from operating cash flow leaves $18.633 billion, versus $25.663 billion a year earlier—a decline of about 27.4%. This simple cash-based measure excludes broader capital investment through finance leases. Growing profits do not guarantee that cash remaining after investment grows at the same pace. [4]

05 | Amazon's after-hours report: Faster AWS growth, substantial cash spending

Amazon reported after the October 29 close that AWS revenue grew 39.3% and quarterly operating income reached $28.076 billion. Trailing twelve-month operating cash flow increased 29% to $168.3 billion, but free cash flow was an outflow of about $42.4 billion. Management continues to expect approximately $220 billion of cash capital expenditures in 2026; that is guidance. [5]

These results support strong cloud and AI demand while showing that returns on investment take time. Amazon's 4.25% regular-session decline preceded the earnings release and cannot represent the market's full response to the new report.

06 | A lower price still needs a careful valuation check

Valuation should be assessed against earnings that can persist. Alphabet reported Q2 diluted EPS of $9.11, of which equity-securities gains contributed $6.26 after tax. Extrapolating historical earnings containing large securities gains can distort a reading of trailing valuation. Securities gains and operating earnings measure different things, so the sustainable earnings base needs careful review. [7]

The Federal Reserve also voted 10-2 on October 28 to hold its target range at 3.75%-4%. Both dissenters preferred a 25-basis-point increase, and the statement continued to describe inflation as elevated. Holding rates steady does not establish a broadly easier funding environment.

07 | Historical recoveries: 107 days and 15 years are very different experiences

Using actual daily Nasdaq-100 closing data, we set each selected pre-selloff peak to 100 and plotted the full path to the first close that regained that level.

The clock starts at the pre-selloff peak, not at the lowest point identified afterward. The financial-crisis comparison uses a 2007 local high. These are nominal price-index results without dividends, fees or inflation adjustments. The episodes are representative cases, not a complete historical sample or a forecast of recovery probabilities.

Buying after a large decline can still involve substantial further losses. After the first close at least 20% below its peak in the 2022 episode, the index fell another approximately 18.1% before its eventual low. In the dot-com episode, the additional decline was about 77.9%. A drawdown threshold does not automatically identify a bottom. [1]

Index recovery also cannot guarantee recovery in every constituent. Index membership changes, and individual companies can permanently lose their previous earning power.

08 | What to watch now

Tiger would focus on three things: stable growth and margins, improving cash-flow pressure, and signs of price stabilization supported by broader company and market performance. No single signal guarantees a bottom.

Investors able to tolerate long-term volatility can begin researching companies with durable earnings, reliable funding and reasonable valuations. Staging purchases and retaining room to adjust can reduce dependence on one entry date, but losses remain possible.

For a short-term rebound trade, caution is especially relevant after earnings. Expectations may keep adjusting, recoveries can reverse, and the holding period may become longer than planned.

Today's conclusion: The pullback has created price changes worth researching. Confidence in buying the dip still depends on earnings, cash flow, valuation and the holding period. Historical recovery charts help make the potential depth and duration of that commitment visible.

Are you focusing on individual-stock recoveries, or first watching a growth-stock basket such as QQQ?

Companies to track: $Alphabet(GOOGL)$, $Microsoft(MSFT)$, $Amazon.com(AMZN)$, $Meta Platforms, Inc.(META)$, $NVIDIA(NVDA)$, $Broadcom(AVGO)$. ETF to track: QQQ$Invesco QQQ(QQQ)$

This article is for information and discussion only and does not constitute investment advice. Past performance does not guarantee future results.