Alphabet's YouTube revenue missed the mark
Class A shares of Alphabet Inc (NASDAQ:GOOGL) are 4.3% lower at $174 this morning, even after the Google parent-company's second-quarter earnings of $1.89 per share and revenue of $84.74 billion both beat estimates. Instead, GOOGL is pulling back amid news that YouTube's advertising revenue of $8.55 billion was well below Wall Street's expectations of $8.83 billion.
On the charts, Alphabet stock earlier pulled back to $172.46, its lowest level since June 4. The security has been falling since its July 10 record high of $191.75. Year over year, GOOGL is still up 41%.
While the results drag the broader market, plenty of analysts chimed in with price-target adjustments. No fewer than 12 analysts raised their price targets, while Morgan Stanley lowered its to $205 from $210 -- still a 12.8% premium to Tuesday's close.
Over in the options pits, 68,000 calls and 62,000 puts have crossed the tape, or six times the average intraday volume. The March 180 put is leading the pack, followed by the weekly 7/26 175-strike call, with positions being bought to open at both.
Short-term options traders are likely cheering the dip, as they've been more put-biased than usual of late. This is per GOOGL's Schaeffer's put/call open interest ratio (SOIR) of 1.16, which stands in the highest percentile of annual readings.