Alphabet's AI Moment: Trading Q2 Results With 2X Bull and 1X Bear ETFs

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Alphabet (GOOGL) reports Q2 2025 earnings on July 23rd after market close, and traders are watching for mixed signals. The tech giant faces ongoing legal battles while investing heavily in AI and cloud services to keep pace with Microsoft and Amazon.

GOOGL shares have lost -1.4% in the past year, significantly lagging the S&P 500's 10% return. This underperformance comes despite the company beating earnings estimates in four straight quarters, including a massive 39% surprise in Q1 when it reported $2.81 per share versus expectations of $2.02.

For active traders looking to play Alphabet's typically volatile earnings moves, Direxion's Single Stock Daily Leveraged & Inverse ETFs provide tactical tools to trade the search leader's price swings without traditional margin requirements.

Q2 Earnings Expectations

Wall Street expects Alphabet to report $2.13 per share in Q2 earnings, up 12.7% from the $1.89 posted in the same quarter last year. This modest growth projection shows Wall Street's concerns about heavy AI spending and competitive pressures in cloud computing.

The company's recent $32 billion acquisition of cloud security firm Wiz, its largest deal ever, adds another wrinkle to the story. Investors will watch closely to see how this massive purchase fits into Alphabet's broader cloud strategy and whether it can boost growth in a segment that disappointed last quarter.

For fiscal 2025, analysts project earnings of $9.56 per share, representing 18.9% growth from fiscal 2024. Looking ahead to fiscal 2026, estimates call for $10.32 in earnings per share, showing expectations for continued but slowing growth.

Stock Movement and Analyst Outlook

Alphabet trades around $183.50, well below its 52-week high of $207 but above the low of $140.53. The stock's modest gains reflect investor uncertainty about the company's heavy AI investments versus profit expectations.

Analyst sentiment leans bullish, with 53 analysts covering the stock. Here's where they stand: 42 "Strong Buy" ratings, 4 "Moderate Buy," and 8 "Hold" recommendations. The average price target of $202.24 sits about 10% above current levels, with the Street-high target of $250 suggesting meaningful upside if execution improves.

Market watchers point to several concerns, including potential antitrust actions that could force asset sales like the Chrome browser. The rise of conversational AI tools threatens Google's search dominance, though the company's work to add AI features to its own products may help defend market share.

Key Factors for Q2 Results

Several elements will move the stock when Alphabet reports:

• Cloud Performance: After Google Cloud's 30% growth disappointed in Q4, investors need to see acceleration. The Wiz acquisition complicates the picture further.
• AI Integration Impact: Management must show how billions in AI spending turns into actual products and revenue opportunities across Search, YouTube, and Cloud.
• Search Resilience: With OpenAI's tools and other AI assistants gaining users, any weakness in Search numbers would concern investors.
• Regulatory Updates: Commentary on antitrust matters and possible fixes could sway sentiment, especially regarding Chrome and Android.
• Capital Allocation: The company's $75 billion AI budget for 2025 needs justification through real progress on product launches and user numbers.
• YouTube Trajectory: Advertising results from YouTube matter greatly as the platform battles short-form video rivals.

Trading GOOGL Earnings With Leveraged ETFs

GOOGL typically sees significant volatility surrounding its earnings releases, creating opportunities for active traders. Direxion's Single Stock Daily Leveraged & Inverse ETFs, introduced several years ago, help traders attempt to amplify or hedge their moves or protect existing positions.

Bullish Play: GGLL

Direxion Daily GOOGL Bull 2X Shares (GGLL) allows traders to attempt to double their bet on Alphabet gains. GGLL seeks daily investment results, before fees and expenses, of 200% of the performance of GOOGL.

• Aims for 200% of GOOGL's daily performance
  • When Alphabet rises 1%, GGLL targets a 2% gain (before fees)
  • When Alphabet falls 1%, GGLL typically drops 2% (before fees)
• Optimal for traders expecting strong cloud results or positive AI commentary
• Tech earnings often produce outsized stock moves
• Average daily volume: 2.2 million shares
• Built for active traders who monitor positions throughout the day

Bearish Protection: GGLS

Direxion Daily GOOGL Bear 1X Shares (GGLS) provides inverse exposure to Alphabet without requiring short-selling*. This feature helps traders in retirement accounts where IRA and 401(k) rules prohibit traditional shorting. GGLS seeks daily investment results, before fees and expenses, of -100% of the performance of GOOGL.

• Seeks inverse (-1X) daily performance versus GOOGL
  • When Alphabet drops 1%, GGLS aims for a 1% gain (before fees)
  • When Alphabet rises 1%, GGLS typically falls 1% (before fees)
• Valuable for traders concerned about weak cloud results or regulatory action
• Allows retirement account holders to make bearish trades on GOOGL on
• Average daily volume: 166,000 shares
• Works as portfolio protection during uncertain earnings seasons

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

Alphabet's mix of AI opportunity and regulatory risk makes its Q2 earnings worth watching for active traders. These leveraged or inverse ETFs provide the tools to attempt to capitalize on whatever direction the stock takes on July 23rd.

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

To learn more about all Direxion's Single Stock Leveraged and Inverse ETFS, Click Here

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 stock 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 longer 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 lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose 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.

The Funds have derived all disclosures contained in this document regarding Class A shares of Alphabet Inc. from publicly available documents. In connection with the offering of each Fund’s securities, neither the Funds, the Trust, nor the Adviser or any of its respective affiliates has participated in the preparation of such documents. Neither the Funds, the Trust nor the Adviser or any of its respective affiliates makes any representation that such publicly available documents or any other publicly available information regarding Class A shares of Alphabet Inc. is accurate or complete. Furthermore, the Funds cannot give any assurance that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of the publicly available documents described above) that would affect the trading price of Class A shares of Alphabet Inc. have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning Class A shares of Alphabet Inc. could affect the value of a Fund’s investments with respect to Class A shares of Alphabet Inc. and therefore the value of the Funds.

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; investments in new businesses, products, services and technologies that may harm its 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, advertisers, customers, content providers and other partners; manufacturing and supply chain issues; interruptions to, or interferences with, its complex technology and communication systems; its international operations; failure to evolve with the advancement of technology and user preferences; data privacy and security concerns; problematic content posted by users; and regulatory, legal and litigation issues.

Technology Sector Risk — The market prices of technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment 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.

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