Alphabet Inc (NASDAQ:GOOGL) shares are down 6.1% to trade at $312.64, after the tech behemoth rattled investors with a capital expenditure forecast of $175 billion to $185 billion for the year, far exceeding expectations of roughly $115 billion. Those expenditures are planned to be a massive investment in data centers to satisfy insatiable demands for AI.
The selloff comes despite strong fourth-quarter results from the Google parent, which reported earnings of $2.82 per share on revenue of $97.23 billion. Analysts remain optimistic, with 17 price target hikes coming in, the highest coming from Mizuho to $410 from $400. The 12-month consensus target price of $343.61 is now a 6.3% premium to current levels.
GOOGL had been hovering near long-term support at its ascending 50-day moving average, but earlier broke below that level for the first time since June 23. Today's drop -- its third straight -- is poised to be the stock's worst single-day performance since May 25. Still, the shares are up 104% over the past nine months.
Options traders are reacting with calls. At last check, over 285,000 calls have already changed hands this morning, volume that's triple the average intraday amount. The weekly 2/6 330-strike call is leading the charge, with weeklies occupying the top 10 most popular contracts.
The security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 84, indicating Alphabet's stock has tended to exceed option traders' volatility expectations during the past year.
