Alphabet Earnings Preview: Trading Q1 Results With Single Stock Daily Leveraged & Inverse ETFs

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Alphabet Inc.'s (GOOGL) Q1 2025 earnings report (April 24th after market close) comes amid intensified attention on artificial intelligence spending and cloud segment expansion. Wall Street will monitor Google Cloud revenue growth, Search monetization metrics, YouTube advertising results, and ongoing capital deployment. 

Following Alphabet's $32 billion all-cash purchase of cloud security firm Wiz—the company's largest acquisition to date—traders will evaluate the leadership team's integration strategy and projected financial benefits.

Beyond these key areas, market watchers will assess Alphabet's competitive standing against rivals in cloud infrastructure, along with progress incorporating AI technology throughout its product lineup. The company's profitability amid aggressive spending will remain a central focus for investors.

As a heavyweight in major indices, GOOGL often sees notable price swings surrounding earnings releases. Traders looking to position around these movements can utilize Direxion's Single Stock Daily Leveraged & Inverse ETFs as tactical trading vehicles for short-term approaches.

Q1 2025 Earnings Outlook

Analysts forecast Alphabet to deliver earnings of $2.04 per share, representing a 7.94% increase from $1.89 in the year-ago quarter. The company enters this report having surpassed consensus earnings estimates in four consecutive quarters, including a 1.42% beat in Q4 2024.

Revenue metrics may command more attention than headline earnings figures. After Q4's Google Cloud revenue grew 30%—below market expectations—and with concerns regarding Alphabet's $75 billion AI development budget for 2025, analysts will watch whether this substantial spending translates into stronger top-line expansion.

Recent Quarterly Performance

Alphabet shares declined 7.3% following its Q4 2024 report despite posting EPS of $2.15, exceeding analyst estimates. This drop resulted from Google Cloud's underwhelming growth rate and market worries about extensive research and development costs.

The stock has underperformed major indexes over the past 52 weeks, gaining just 1.4% versus the S&P 500's 4.7% rise and the Communication Services sector's 13.5% advance. This lag reflects investor uncertainty about Alphabet's growth prospects while allocating billions toward AI development.

Despite these challenges, Alphabet has posted strong earnings results, with quarterly beats ranging from 1.42% to 26.85% over the past year. Q4 2024 revenue reached $96.5 billion, with analysts projecting growth throughout 2025.

Wall Street Outlook and Stock Positioning

Analyst sentiment remains largely positive, with 41 of 53 analysts maintaining "Strong Buy" ratings, three recommending "Moderate Buy," and nine suggesting "Hold." This distribution shows improved confidence compared to three months prior, when 39 analysts rated Alphabet as a "Strong Buy."

GOOGL currently trades below the average analyst target of $214.70, suggesting potential upside according to Wall Street estimates. However, investors remain cautious given rising competition from established players and newer entrants in the AI space.

Trading Alphabet's Earnings With Specialized ETFs

GOOGL's established history of earnings-driven volatility creates significant trading opportunities. Direxion's Single Stock Daily Leveraged & Inverse ETFs, introduced in 2022, offer methods to trade Alphabet's price action without traditional margin requirements or short-selling limitations.

These products employ derivatives to achieve precise daily exposure, ideal for high-impact events such as earnings announcements whether you want to capitalize on the upside or downside.

Bullish Strategy: GGLL

Direxion Daily GOOGL Bull 2X Shares (GGLL) allows traders to seek increased exposure to Alphabet stock. GGLL 200%, before fees and expenses, of the daily performance of GOOGL through a portfolio built for amplified exposure.

• Aims for 200% of GOOGL's daily performance, before fees and expense
  • A 1% increase in Alphabet targets a 2% gain for GGLL (before fees)
  • A 1% decrease in Alphabet targets a 2% decline for GGLL (before fees)
• Optimal for traders anticipating strong earnings results or favorable guidance
• Trading activity peaks during quarterly report periods
• Maintains daily volume around 959,000 shares
• Created for active traders who closely monitor their positions

Bearish Strategy: GGLS

Direxion Daily GOOGL Bear 1X Shares (GGLS) seeks inverse exposure to Alphabet without requiring short selling*. This makes GGLS valuable for retirement account traders who cannot short stocks directly in IRAs or 401(k)s.

• Seeks inverse (-1x), before fees and expenses, of the daily performance of GOOGL
  • When Alphabet drops 1%, GGLS aims for a 1% gain (before fees)
  • When Alphabet rises 1%, GGLS aims for a 1% decline (before fees)
• Well-suited for traders expecting disappointing cloud numbers or concerning spending outlook
• Allows retirement account holders to express negative views on GOOGL
• Sustains trading volume exceeding 50,000 shares daily
• Serves as an effective hedging instrument for existing Alphabet positions

Both GGLL and GGLS reset their exposure daily and work best as short-term trading tools rather than buy-and-hold investments. These instruments require active oversight and are built for traders who understand leverage effects and daily rebalancing dynamics.

*Short-selling is a trading strategy where investors borrow shares and sell them, hoping the stock price will fall.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stack rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock's performance over periods /anger than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will Jose money if the underlying stock's performance is flat, and it is possible that the Bull Fund will Jose money even if the underlying stock's performance increases. and the Bear Fund will lose money even if the underlying stock's performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in GOOGL.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund's investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund's other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with GOOGL and may increase the volatility of the Bull Fund.

Daily Correlation Risk - A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with GOOGL and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to GOOGL is impacted by GOOGL’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to GOOGL at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to GOOGL increases on days when GOOGL is volatile near the close of the trading day.

Daily Inverse Correlation Risk - A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with GOOGL and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to GOOGL is impacted by GOOGL’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to GOOGL at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to GOOGL increases on days when GOOGL is volatile near the close of the trading day.

Alphabet Inc. Class A Investing Risk — Alphabet Inc.’s Class A shares face risks associated with: reliance on advertising revenue and the effect that loss of partners or new and existing technologies that block advertisements online may have on its business; intense competition for its products and services across different industries; investments in new businesses, products, services and technologies that may divert management attention or harm its financial condition or operating results; slowdowns in its revenue growth rate; the ability to protect its intellectual property rights; the ability to maintain or enhance its brands and its impact on the ability to expand its user base, among other risks. 

Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production costs. 

Interactive Media & Services Industry Risk — The prices of technology and media companies, especially those of smaller, less-seasoned companies, tend to be more volatile and less liquid than the overall market. These companies are subject to rapid changes in technology and consumer platform preference, including the increased use of mobile-based apps, competition for advertising revenue, changes in audience preferences, evolving industry standards and frequent new product productions. 

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily GOOGL Bear 1X Shares, Shorting or Inverse Risk.  Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

Distributor: ALPS Distributors, Inc.

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