GOOGL Call Options Surge as Stock Dips 11.5%
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- Alphabet (GOOGL) fell 11.5% from a Feb. 2 peak of $343.69 to $303.78 on the morning of March 4, a slide triggered by its Feb. 4 earnings release.
- Barchart's Unusual Stock Options Activity Report recorded nearly 1,000 call contracts traded at the $302.50 strike price expiring March 9, 2026 — a bet the dip is overdone.
- Alphabet's free cash flow hit $73.2 billion in 2025, an 18.2% FCF margin that rose roughly 1% year-over-year despite a 74% spike in AI-related capex.
- Operating cash flow margin climbed to 40.9% in 2025 from 35.8% the prior year, keeping the cash engine running through heavy infrastructure spending.
- Three independent analyst surveys cluster above the current price: Yahoo Finance's 68 analysts average $359.24, Barchart's mean is $379.11, and AnaChart's 35 analysts average $339.86.
- The article's FCF-based valuation projects GOOGL at $376.69 in the next 12 months, a 24% gain, if free cash flow reaches $72 billion in 2027 — implying the selloff was overdone.
Why it matters: With GOOGL at $303.78 against analyst targets spanning $339.86 to $379.11, the options flow at the $302.50 strike is a short-dated bet that the post-earnings slide overcorrected. Alphabet generated $73.2 billion in free cash flow on a 40.9% operating cash flow margin in 2025, meaning option buyers are wagering the market misread the capex-vs-FCF tradeoff.
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