There was a time when Microsoft Edge was the most popular browser in the world, and people used Yahoo for searches. Then came Google and everything changed. Google dominated the search space for so long that it became a verb, but all that might be about to change. ChatGPT became the fastest-growing app of all time with over 1 million users in the first month, and as of March 2023, Bing has over 1 billion visits per day, and it’s still rising. So how will this shift in search dynamic change GOOGL’s profitability and share price?
Google revenue
Google’s cash cows are the advertisers that promote their products and services on Google. The cost of advertising depends on how competitive the topic, and competitiveness is calculated by how many people are searching, So if people continue to leave Google search in favor of the A.I.-assisted Bing search, revenue will fall. And when revenue falls, investors get cold feet and jump ship. GOOGL already took a massive hit when Google’s Bard A.I. was publicly ridiculed, and there’s no positive news on the horizon for Google A.I.
GOOGL Technicals
In the short term, we can see an acceleration in the bearish trend on the GOOGL chart, which is a positive signal for sellers. As long as the price remains above 105.52 USD, a sell order could be considered.
The first bearish objective is located at 95.65 USD. The bearish momentum would be revived by a break in this support. Sellers would then use the next support located at 85.94 USD as an objective. Crossing it would then enable sellers to target 64.54 USD. If the price were to return above 105.52 USD, it would probably only trigger a small rebound in the short term to give a better base for restarting. Trading this rebound may be risky.
MSFT Technicals
A very similar bearish trend can be seen for MSFT. As long as the price remains below the resistance at 226.99 USD, close attention is warranted for coming opportunities.
The first bearish objective is located at 213.64 USD. The bearish momentum would be revived by a break in this support. Sellers would then use the next support located at 197.77 USD as an objective. Crossing it would then enable sellers to target 183.44 USD. As with GOOGL, excesses could lead to a short-term rebound that would stop out accounts in a “short”, especially if limited equity or high leverage apply. Exness Stop Out Protection calculates equity based on the mid-price between the bid and ask and not the temporary extremes, and may provide a cushion for your positions with a higher chance of recovering. Just remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating a reversal of the trend.
Conclusion
Both GOOGL and MSFT seem to be in a freefall, but tech stocks are known for rollercoaster rallies and crashes. Which one will make its reversal first is unclear, but if Google doesn’t do something world-changing in the coming weeks, we might be witnessing the end of an era. Check both charts every day for early signs of a reversal and keep an eye on media for news that could make or break the search giants.
