To The Moon

Is google rally coming to an end, will there be a pullback before the rally pick up again in Jan 2026? or shall we sell into the hype?

There is no guarantee what Alphabet (parent of Google) stock will do. But in this article I would like to share and walk through what analysts and recent events suggest, and where a “pullback-then-rally-again” scenario might make sense (or why it could keep going).

— but I can walk you through what analysts and recent events suggest, and where a “pullback-then-rally-again” scenario might make sense (or why it could keep going).

What Argues For The Rally Continuing Into 2026

Strong fundamentals: Alphabet recently reported record earnings: growth across Search, ads, cloud and AI businesses — including solid gains in its cloud segment and broader AI monetization.

AI momentum and transformation: Many on Wall Street view Alphabet as a major AI winner: its AI-powered services and infrastructure are seen as giving it an edge in the ongoing AI boom.

Long-term growth potential: Some analysts forecast roughly double-digit earnings growth (and reasonable valuation) over the next several years — which supports a bullish long-term view.

Market optimism & institutional backing: A large institutional investor recently disclosed a big stake in Alphabet — a vote of confidence that seems to reflect broader belief in the company’s medium-term prospects.

Hence, many analysts expect further upside over coming years, which suggests holding (or even buying) could be justified if you believe in the long-term story.

What Argues For A Possible Pullback (or Caution)

Valuation and near-term targets: Some aggregated targets for the next 12 months are modest, even suggesting little to no upside — or a slight downside — from recent prices.

Broader market risk & “frothiness”: The recent rally has made many tech stocks (especially AI-linked) run up sharply; historically that can attract short-term profit-taking or a correction.

Dependence on macroeconomic variables: Interest rates, global economic growth, and regulation — including potential antitrust or regulatory action — could weigh heavily on future performance. While not imminent, these are always risk factors for large tech firms.

Uncertainty about how much “AI hype” is already priced in: If much of the AI-based optimism is baked into the current price, further upside may require strong execution and continued growth — which is not guaranteed.

What could happen between now and Jan-2026 (two plausible scenarios)

Given the current mix of “strong fundamentals + elevated valuation,” the “pullback — then rebound” pattern seems quite plausible, but a straight climb can’t be ruled out either.

Our Thoughts: Sell into hype — or hold?

If you have a short-term horizon (next 6–12 months) and want to lock in gains, selling part of your position now — before a possible pullback — could be reasonable. If you have a longer-term horizon (3–5 years or more) and believe in AI + cloud growth, holding (or even adding more) looks like a defensible strategy.

I am having a longer-term horizon at least 3 years for $Alphabet(GOOGL)$ and other AI stocks, so I might be looking to add more stocks, or use option play to take advantage of potential upside of GOOGL.

In the next section, I would like to share what I would look at the three plausible scenarios (Bullish / Base / Bearish) for Alphabet Inc. (GOOGL) going into end-2026. I base these on recent earnings, analyst estimates, valuation metrics, and known risks.

Scenario 1 — Bullish

Price range: ≈ US$ 380–420

Why it works: If Alphabet sustains its recent growth momentum — from advertising, cloud, and AI (especially strong AI integrations like its chip/TPU push + AI-powered services) — earnings per share (EPS) could rise meaningfully. Some bullish-case analyses expect EPS in 2026 to move toward the $12–$13 range.

That growth, combined with a moderately elevated forward P/E ratio (but still justifiable given growth prospects), could support a stock price well above current levels. Some forecasts already eyeball ~ 50% upside by 2026.

In this scenario, broader macro conditions remain favorable (stable interest rates, supportive markets), and AI/cloud adoption accelerates — giving Alphabet outsized investor confidence and valuation expansion.

Current Phase (Dec 2025): The stock experiences a pullback from recent highs, heading towards the "Buy Zone" (green area).

Support Level: The dip stabilizes around the $300 support level in late December/early January, presenting the potential entry point.

The Rally: Momentum picks up in early 2026 (likely post-earnings), driving the price upward into the Target Range of $380–$420 (yellow area) by mid-year.

Scenario 2 — Base / Most-Likely

Price range: ≈ US$ 300–345

Why this seems plausible moderate outcome: Many analyst-consensus targets for 2025/2026 cluster in this range, with median or average forecasts around $312–330.

This corresponds to a case where Alphabet delivers decent earnings growth (ads + cloud + AI), but macro conditions are stable but not spectacular, and valuation remains relatively conservative (i.e. forward P/E ~ mid-20s to low-30s).

This scenario assumes no major negative shocks (like regulatory crackdown or sharp ad-spending cutbacks), but also no breakout exponential growth or re-rating.

The Pullback: Similar to the bullish case, this scenario accounts for the immediate post-rally dip in December, finding a floor near the $300 psychological support level.

The Range: Instead of a sharp breakout, the stock enters a "trading range." It oscillates between $300 (Support) and $345 (Resistance). This often happens when the market waits for the next big catalyst (like the full impact of 2026 AI revenue) to justify higher valuations.

Strategy: In this environment, "swing trading" (buying near $300, selling near $345) is often more effective than a simple "buy and hold," as the stock moves sideways rather than trending strictly up.

Scenario 3 — Bearish

Price range: ≈ US$ 240–260

Why it might drop: Some valuation analyses (e.g. discounted-cash flow / intrinsic-value methods) suggest that the current price may already reflect a premium. One such valuation puts a “fair value” around US$ 244.50.

If growth disappoints — for instance, slower growth in advertising due to macroeconomic softening, weak cloud/AI monetization, or increased regulatory/antitrust pressures (e.g. tighter privacy or ad-regulation laws globally) — then investor sentiment could sour.

Also, if the market rotates out of high-valuation growth/tech stocks (something that often happens when interest rates rise or economy slows), high-P/E tech like Alphabet tends to be hit harder.

What’s the “most likely” based on today’s data

Given:

a forward P/E in the mid-20s to low-30s based on 2026 estimates, which compared to its growth prospects appears “not ridiculously expensive.”

earnings growth is still expected to remain reasonably strong over next few years — some estimates put 2024–2027 EPS growth at a ~16–17% annual rate.

→ My “base-case” (US$ 300–345) seems the most probable, unless there’s a major positive trigger (AI breakthrough, huge cloud/enterprise ramp-up) or a major shock (macro or regulatory).

Summary

Not necessarily ending, but likely pausing. Google stock has rallied significantly (~13% in November), driven by strong Cloud revenue and the launch of Gemini 3. However, technical indicators (like the RSI) suggest the stock is currently "overbought."

• Short-Term: A consolidation or minor pullback is highly probable in December as traders take profits after the recent surge.

• Long-Term: The broader trend remains bullish. Fundamentals are strong, with AI investments finally yielding tangible profits, separating Google from "hype-only" AI stocks.

A mild pullback is likely before Jan 2026. Market analysts expect some volatility in December due to year-end portfolio rebalancing and the stock's extended valuation.

• The Opportunity: If the stock dips (watch for support levels around $300 or the 50-day moving average), it is viewed by many analysts as a "buy the dip" opportunity rather than a signal of a crash.

• Jan 2026 Catalyst: The rally is expected to pick up again leading into the Q4 earnings release in late January/early February 2026, where investors anticipate updated guidance on AI capital expenditures and 2026 revenue targets.

Should investors sell into the hype? Our consensus would be Hold (or Trim), Do Not Dump. Most experts advise against a full sell-off, as the "hype" is backed by earnings growth (unlike the Dot-com bubble).

• Strategy: If you are a short-term trader, selling some into this strength to lock in profits is prudent given the overbought signals.

• For Investors: The consensus is to hold. Wall Street targets suggest a path toward a higher valuation (some eyeing a $5T market cap by late 2026). Selling now risks missing the next leg of growth driven by the continued rollout of Gemini and TPU infrastructure in 2026.

Bottom Line: Expect a choppy December with a potential dip, followed by renewed momentum heading into 2026 earnings.

Appreciate if you could share your thoughts in the comment section whether you think GOOGL could still have rooms for a nice rally after a potential dip first.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.