Alphabet Stock Cools After Google Cuts Cloud Commissions

Alphabet's Google slashed the commissions its receives from its Cloud Platform to 3%

Deputy Editor
Sep 27, 2021 at 3:16 PM
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Reports have surfaced that Alphabet Inc's (NASDAQ:GOOGL) Google will cut the commissions it makes on its third-party software sales from its Cloud Marketplace to 3% from 20%. Pressure has been mounting on many Big Tech companies to cut their "take rates," and Google is attempting to best its competition and attract independent software creators to its platform, according to someone familiar with the matter. 

GOOGL is off 0.7% at $2,827.79 this afternoon, heading lower with the better part of the tech sector, and set to snap its four-day win streak. The stock just came off a Sept. 1 record high of $2,925.07, though it's chopped lower for most of the month. Despite this, the 50-day moving average helped launch the stock higher mid-September, and the security is up an impressive 61.2% this year. 

googl sept 27

Sentiment surrounding the tech giant is strong. Of the 33 in coverage, all but one consider it a "buy" or better. Meanwhile, the 12-month consensus price target of $3,159.08 is an 11.8% premium to current levels. 

For those wanting to speculate on GOOGL's next move without the hefty price point, options may be the way to go, especially considering the stock's Schaeffer's Volatility Index (SVI) of 18%, which stands higher than only 10% of readings from the past 12 months. This means options traders are pricing in relatively low volatility expectations at the moment. Adding to this, Alphabet stock's Schaeffer's Volatility Scorecard (SVS) stands at 89 out of a possible 100, implying the stock tends to outperform these volatility expectations -- a good thing for buyers. 

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