Google's market value evaporated nearly $500 billion after its earnings report, with analysts expecting the stock price to remain range-bound in the short term.

BlockBeats news, October 31, according to CNBC, Google's parent company Alphabet's stock price fell more than 12% to $285 after the release of its third-quarter earnings report, with market value shrinking by nearly $500 billion. Although Google Cloud revenue grew 103% year-over-year, the market remains focused on earnings per share missing expectations and negative free cash flow amid continued investment in AI infrastructure.

Mike Khouw stated in a CNBC column that Alphabet's core business fundamentals remain intact, but a short-term rapid rebound faces two obstacles. First, multiple institutions have downgraded ratings, target prices, or future earnings forecasts. He noted that historically, stocks that experience concentrated rating downgrades tend to underperform the market or trade sideways in the following 30 days, and institutional rebalancing also limits upward momentum. Second, the gap-down after earnings further damaged the technical setup.

On technical indicators, Alphabet's RSI has dropped to the low 20s, and the MACD sell signal has strengthened. However, Khouw believes that with the stock price near its 52-week low of $270.70, combined with extremely oversold conditions, further declines may be limited.

In terms of trading strategy, Khouw proposed using a short strangle options strategy to address the expected range-bound trading. He believes that continued selling in the broader market is the main downside risk, while an unexpected positive catalyst driving a rapid stock price increase could threaten the call-selling leg of the strategy.