To The Moon

I. Fundamentals: Shine Fading Slightly, but the Giant Is Still Doubling Down

Google's AI product Gemini has seen its reputation and rankings slip somewhat this year, but that hasn't dampened the market's long-term optimism toward the company: Buffett has placed a heavy bet on it and publicly voiced his support in a CNBC interview.

Google is set to report earnings after Wednesday's close (7/22), and the results will carry significant weight for the broader market. Investors will be laser-focused on two main threads: capital expenditure and cloud revenue.

However, one thing to keep in mind: expectations may already be fully priced in. Without a surprise, the post-earnings stock reaction is likely to be loud but shallow – though spillover effects could still ripple through the semiconductor sector.

Core expectations at a glance:

• Cloud: Investors are pricing in +70%~75% YoY growth, well above the Street's +64%. For 2027, most estimates point to ~80% cloud growth (vs. the Street's +52%), with the main variable being TPU sales.

• Capex (key): 2026 guidance stands at ~$190B–$200B. After the June equity raise, 2027 expectations have been lifted to $325B–$350B, far exceeding the Street's $250B, and is expected to consume free cash flow next year. 2028 estimates have been raised from ~$290B to $365B–$370B.

• EPS: 2027 expectations are $15.5–$16 (Street $14.75); 2028 around $19–$20 (Street $17.5), depending on the scale of capex and cloud operations.

II. Volatility Projection: This Week's Implied Move ±6.57%

Based on Monday's pre-market price of $346.77 and using ATM at-the-money options, the implied price move for this week (expiring 7/24) is approximately ±6.57%, corresponding to a range of roughly $323–$370 – essentially capped by the MA60 on the upside and the MA200 on the downside. If the earnings report fails to break this range, the stock will likely continue its broad sideways chop.

Combining options open interest data, 347 is the key level for this earnings print:

• Bullish surprise (cloud/capex beat): Holding above 347 → push toward 355 → 360; strong momentum could test the upper bound of 370.

• Miss or cautious guidance: Breaking below 347 → entering negative gamma territory, accelerating downside to 340 → 330, with extremes reaching 323.

• Neutral / in-line: After IV crush, the stock will most likely settle around 350–352.5 (the max pain level) and chop sideways.

III. Block Trade Analysis: Bullish Bias, but Not Full-Throttle Conviction

• Roll trades (cautiously bullish): An existing long 415 Call expiring 8/21 was closed (-42K contracts) and rolled into a 410 Call $GOOGL 20260918 410.0 CALL$ expiring 9/18, with ~55K contracts opened. The one-month extension coupled with a downward strike-price adjustment suggests that traders lack strong conviction in an immediate post-earnings rally and expect some sideways consolidation/drawdown, prompting them to push positions out and lower the strike. However, the strike remains OTM, indicating a directional bias remains bullish.

• Weekly options (strongly bullish): A large block of 382.5 Calls$GOOGL 20260724 382.5 CALL$ expiring 7/24 saw ~5K contracts opened, with a notional value of over $2M – a high-conviction bet on this earnings report.

• Flow overview: Over the past 5 days, Call OI increased by 127K contracts vs. Put OI up 87K, a net differential of +40K – bulls have the edge. Unusual activity also leans Call-heavy, led by the 355 Call (+2.6K).

IV. Three Scenarios and Corresponding Strategies

Scenario 1: Range-bound chop (323–370, move ≤ ±6.57%) – Most Likely

Expectations are met, no surprises, and IV collapses post-earnings (IV crush). This environment – high IV → event resolution → volatility contraction – favors options sellers:

• Consider selling a Short Strangle or Iron Condor, with short strikes placed below support at 340 and above resistance at 360, to capture IV crush and time decay. The Iron Condor uses long legs to hedge tail risk.

• If inclined to take assignment, sell Puts below the 340 support level – e.g., Sell Put 330 $GOOGL 20260724 330.0 PUT$ – to acquire shares at a discount if breached, or collect premium if not.

• ⚠️ Risk: If earnings deviate sharply from expectations, sellers can get squeezed on either side – keep position sizes modest.

Scenario 2: Breakout above 370 (Stronger-than-expected upside)

Holding above 347 and breaking through resistance at 355–360 pushes the stock to the upper bound. With IV still elevated, chasing a naked long Call is expensive and vulnerable to IV crush:

• Consider a Bull Call Debit Spread – buy an ATM Call and sell a higher-strike Call (e.g., 360$GOOGL 20260724 360.0 CALL$  /380$GOOGL 20260724 380.0 CALL$ ) to cap cost and reduce IV exposure.

• Alternatively, wait for a breakout and a retest of 360 as support before entering – a more stable entry than chasing highs.

• For sellers: Sell Puts at elevated levels (e.g., 375–380), or AMT($GOOGL 20260724 350.0 PUT$ ) to collect premium, betting against a sharp pullback.

Scenario 3: Breakdown below 323 (Miss / cautious guidance)

Breaking below 347 enters negative gamma territory, and further losses through 340/330 support accelerate the downside:

• Consider a Bear Put Debit Spread (e.g., 340$GOOGL 20260724 340.0 PUT$ /320$GOOGL 20260724 320.0 PUT$) to control cost while positioning for the downside leg.

• Do not rush to buy the dip – negative gamma amplifies downside momentum. Wait for stabilization and IV to subside, then sell Puts at strong support levels (e.g., 300–310, where heavy Put OI has accumulated for September) to acquire shares, complemented by a wheel strategy for rolling premium income.

⚠️ Disclaimer: The above is an observational and strategy illustration based on publicly available options data, intended for educational and informational purposes only. It does not constitute any investment advice. Investing involves risk, and options are derivative products. Please assess your own risk tolerance before making any investment decisions.