AI summary
Summary of article:
Alphabet declined and experienced a death cross due to concerns over lack of cash and weak financial reports on AI. However, historical experience and oversold indicators suggest that the selling pressure may not continue to extend.
artificial intelligence (AI) Investment concerns about burning money have intensified, leading toGoogle The stock price of parent company Alphabet fell 13% on the 29th, setting a record for the largest one-day decline in the company’s history. This fall was so violent that it marked the beginning of the “Death Cross”. This shows whether the selling pressure on the stock will increase in the coming time or will it end?
Analysts pointed out that the downward trend in Alphabet’s share price has continued for several months, indicating that the AI strategy has been questioned by investors. Recently released third-quarter earnings fell short of market expectations, causing the stock to post its worst one-day decline in history and triggering a technical signal called the “death cross”, which signals a bearish market outlook.
MarketWatch reported that Google’s stock price fell on Thursday, with the 50-day moving average falling below the 200-day moving average, forming a “death cross.” Some analysts believe that this is a bearish sign in the future, indicating that the stock’s momentum has seriously weakened and the downward trend may continue.
For Alphabet, this may not happen. Dow Jones market data shows that the stock has suffered five “death crosses” over the past ten years, but in four of these cases, the stock price continued to rise six months later, with an average increase of 21.9%.
The last time a “death cross” was seen in Alphabet’s stock price trend was on April 8, 2025, when the stock fell 29.9% from its previous record high closing price. Looking back later, when the “Death Cross” signal flashed, the selling pressure also decreased on the same day.
Another technical indicator shows that pessimism towards Alphabet has reached its peak. The stock’s 14-day relative strength index (RSI) has fallen to 23.1, its lowest level since June 2011, indicating the stock is “oversold.” If the RSI falls to 30 or less, it is generally considered that the stock is oversold and the stock price has fallen below its fair value.
NewStreet Research analyst Salmon issued a report saying Alphabet will still face headwinds until market confidence in the company’s “search business fundamentals and AI monetization capabilities” strengthens, which may not happen until the first half of 2027.
Summary FAQ
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The main reason was that third-quarter earnings fell short of market expectations, and investors grew skeptical about the AI strategy’s cash consumption and liquidity. Alphabet’s stock price fell 13% in a single day, setting a record for the largest decline in the company’s history.
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Death cross refers to the 50-day moving average falling below the 200-day moving average. This is generally considered a bearish sign of the market outlook, meaning that the stock price momentum has weakened and selling pressure may continue. However, for Alphabet, historical results may not be completely consistent.
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Dow Jones market data shows that Alphabet has experienced five death crosses over the past 10 years, four of which have been followed by a six-month rise, with an average rise of 21.9%. Furthermore, the RSI has dropped to 23.1, indicating that the stock price may be severely oversold.
