Wall Street has its spotlight zeroed in on artificial intelligence behemoth Nvidia, which just beat on earnings but guided only slightly higher on sales. And as Nvidia stock remains in buy range as of Wednesday's close, fellow AI leader Alphabet is also in focus. Once again joining its fellow Magnificent Seven stock on the IBD Breakout Stocks Index, Google stock has teed up a new buy point of its own.
Game On For Google Stock
Updated weekly, the IBD Breakout Stocks Index showcases companies in or near a buy zone. Both Alphabet and Nvidia were featured last week and made repeat appearances in this latest update.
With its much-awaited earnings looming, Nvidia's next-gen AI chip, Blackwell, is struggling with overheating issues. But on Tuesday, the stock shook off that news, bouncing off its 21-day exponential moving average. It closed the session up almost 5%. On Wednesday, Nvidia closed within its buy zone, holding well above its 21-day benchmark.
Google stock stands poised to launch a breakout of its own. The search, cloud computing and AI giant has crafted a cup with handle offering a 182.02 buy point. Like Nvidia, Alphabet has bounced off its 21-day line. Google stock closed the day 3% shy of a breakout.
See Who Joins Google And Nvidia On The IBD Breakout Stocks Index
Alphabet's Solid Growth Driving Demand
A very strong 2.3 up/down volume ratio shows clear and current demand for Google stock. The score more than doubles the 1.0 reading needed to indicate demand.
Solid double-digit growth helps drive Wall Street interest. In the first three quarters of the year, Alphabet has posted earnings growth ranging from 28% to 53%. For Q4, analysts expect a 29% gain to $2.12 per share. For the full year, consensus estimates call for a 40% gain to $8.01 a share.
Revenue has been solid and stead, ranging from 11% to 15% over the last five quarters. For the fourth quarter, Wall Street forecasts a 12% increase in sales to $96.7 billion.
Nvidia Earnings On Tap: Stock Edges Lower. (Live Coverage)
Risk Management: A Note On Google Stock, Nvidia
Investors should note that the current bases for Alphabet and Nvidia are third- and fourth-stage. While such patterns can deliver solid gains, they entail more risk. Stocks in a third-, fourth- or later-stage pattern have, by definition, already made a substantial move. A pullback to regroup and reset after such a climb is not common, keeping risk management top of mind.
That said, Google stock did relieve some of that pressure with the pullback in its current base.
It nearly reset its base count in September. The count is reset when a stock undercuts the low of the most recent base. After the April 1 breakout, Google fell below the 153.78 buy point but did not undercut the 130.66 low of the base.
For top growth stocks these two Magnificent Seven members, investors should always follow sound rules for how to buy stocks and when to sell stocks. That's particularly true when such market leaders form later-stage bases.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
