Alphabet (GOOGL) Week Review: EU Hit, Gemini Delays, Earnings Wednesday

TradingKey - Alphabet (NASDAQ: GOOG) closed the week at $346.77, down 2.2% on Friday due to a worsening tech sector, two EU regulations, and a delay of the Gemini AI model. The combination of the EU Court of Justice making the 4.1 billion euro ($4.67 billion) Android antitrust fine final and Google being order by the European Commission via the Digital Markets Act (DMA) to open 11 Android features and organized anonymized search data to competing AI by 2027, and Alphabet reporting major delays of the Gemini 3.5 Pro, made last week particularly challenging. Q2 2026 results are set for Wednesday, July 22. Projections are for $116.9 billion with EPS of $2.90. Trend line support is $341.43.

Last Week in Review — Three Hits That Arrived Together

The conclusion of the Android antitrust case Google lost at the EU Court of Justice on July 2, marked the end of the 8-year legal battle for the 4.1 billion euro fine (about $4.67 billion). The fine is made particularly manageable because it is less than $5 billion and Alphabet reported $109.9 billion in revenue for Q1 alone. The fine will also strengthen new cases and set the record for other legal cases being brought against Google in the EU, which will further increase the EU fines against Google.

A more future-oriented headwind arrived on July 17-18. The European Commission, as part of the Digital Markets Act, issued binding interoperability orders requiring Google to open 11 Android features to competing AI assistants and to share anonymized search data with competing search engines and AI chatbots. The EC will likely issue a formal compliance order by July 27; the rules will come into effect in 2027. Among the two, the data-sharing requirement is more strategically important.

Google's anonymized search data is foundational to the search and advertising scaffolding, and mandated sharing to competitors would directly undermine the proprietary edge of Google Search, which is essential to the 19% growth of its revenue. Concerns about execution have been aggravated by the confirmed delay of Gemini 3.5 Pro, especially given the high valuation, which is primarily driven by projected growth of Cloud and AI adoption in enterprises.

What Q1 Built and What Q2 Should Build

Results for Alphabet for Q1 2026 were outstanding, and showed positive growth in every business segment. Consolidated revenue of $109.9 billion represented a year-on-year growth of 22% and the 11th consecutive quarter of double-digit growth. Revenue of Google Cloud grew by 63% and passed the $20 billion mark, while the operating income grew by more than 3 times and reached $6.6 billion. The Cloud backlog almost doubled and reached $462 billion. Search revenue grew by 19% and reached $60.4 billion, despite the concerns that the new AI features would compete with and disrupt the traditional search advertising. The operating margin grew to 36.1% and operating income reached $39.7 billion. The dividend per share increased by 5% to $0.22.

Wednesday's Q2 report is raising the stakes with $116.9 billion in revenue expected, an increase from $109.9 billion in Q1, and EPS of $2.90. Stocks will be affected by the following four variables: expected Cloud revenue with a slower growth rate from the previous quarter of 63%, but the extent still matters; Search ad growth, with any level of AI-driven self-cannibalization strengthening the EU data-sharing risk perspective; the capex update, where an increase from an already large guidance of $180 to $190 billion for FY2026 would be concerning for free cash flow; and any level of commentary on the market's lack of information on the new timeline for Gemini 3.5 Pro. Expectations continue to increase for the Wiz Cybersecurity acquisition, which is expected to mitigate the risk of EU data-sharing concerning customer data.

GOOGL Technical Setup — Trendline at $341, RSI 37, Key Levels This Week

Based on the 4-hour time frame, GOOGL is at $346.77, below the 50 EMA ($357.99) and 100 EMA ($358.80). A descending trendline from the July peak at $374.59 caps recoveries. RSI is 37 and is getting close to the oversold indicator. There is a convergence of support with a rising trendline from the lows of June, valued at $341.43. This is the key support level. A confirmed bounce at this level targets $352.75, then $362.29, and then $374.59.

A break below $341.43 opens the door to $333.44 and $324.48. A strong Cloud growth number is cited for a good print on Wednesday with most stable guidance of capex for the remaining quarters, which may lead to GOOGL closing above the EMAs in the $357 to $359 range.

GOOGL Price Chart - Source: Tradingview

• Q2 earnings: Results will be published July 22, after market hours, with estimates of total earnings at $116.9B and EPS at $2.90.
• EU Fine: The final verdict of the EU court on the Android antitrust case is set at $4.1B (July 2).
• DMA Order: Google is compelled to open 11 Android features for competing AI products and will provide compliance on July 27. Google also must offer anonymized search data.
• Gemini Delay: The rollout of Gemini 3.5 Pro is delayed (July 18) and raises concerns for the execution of Google’s AI products.
• Trendline Floor: $341.43 is the value that needs to be maintained, as closing below this mark reaches $333.44 and $324.48.
• Recovery Path: Once $341.43 is surpassed, $352.75, $362.29, $374.59 are the target closing values, with an across the board above $357-359 EMAs.

Google and the EU Order

Two main orders were set against Google by the EU commission. Of the two, the first is providing access to 11 Android features for competing AI voice products, which can now complete location searches and book transportation, and will also be able to perform other background tasks. This will be enforced by July 2027. The second requires Google to provide anonymized search data from Google search and will begin to comply with other competing AI chatbots and search engines by 2027. This search data is being used to refine search ranking and Google’s ad systems. A formal compliance order will be published July 27. Google has claimed that the orders will in turn decrease user’s privacy and will also compromise user’s data protection, though the commission has stated that data protection standards and security will be established for compliance.

What is the Delay of Gemini 3.5 Pro and Why is it Significant?

On July 18, Alphabet stated that the rollout of their Gemini 3.5 Pro AI model would be delayed. Gemini 3.5 Pro is an advanced version of Alphabet's primary AI model for enterprises, which help to increase overall Cloud revenue by integrating AI features into Google Workspace, Vertex AI, and enterprise Gemini subscriptions. The delay is important because Google Cloud's revenue in Q1 grew 63% year over year due to the adoption of enterprise AI solutions, and the number of paying Gemini Enterprise users increased by 40% compared to the previous quarter. Delays of products coinciding with EU directives and mandatory data sharing creates a cumulative risk situation for Q2 earnings; mandatory data sharing will affect Google’s proprietary AI data, and the delays will further slow advancements for Google Cloud.

What Factors Will Influence Stock Price at Wednesday's Q2 Earnings?

The stock will respond to these four items: the growth rate of Cloud revenue which in Q1 reached 63% with a deceleration band of 45-50% considered a disappointing outcome; Search revenue which must show AI Mode and AI Overviews are driving growth in commercial queries, not the opposite; an increase in FY2026 capital expenditure is expected to offer up $180-$190B and any increase is considered an outlay with negative opportunity cost; and a clear resolution of the status of the delays for Gemini 3.5 Pro. The EMA cluster between $357-$359 must be overcome with a strong report.

The Bottom Line

Last week, Alphabet closed at $346.77. This followed a series of unfortunate events: the EU issuing their final ruling regarding Alphabet's Android anti-competitive practices (a $4.67B fine), a new DMA ruling forcing Alphabet to open their Android functions and search data to their competitors, a delay of Gemini 3.5 Pro, and a general sell-off of technology stocks. The impact of the three latter events will be long term, but they arrived with Alphabet's Q2 earnings report. The Q2 report is also expected to include growth of the Cloud, Search durability, capital expenditures, and the Gemini 3.5 Pro timeline. This report will determine if GOOGL will return to the $357-$359 EMA cluster this week. The consensus among analysts is a price target of $433.14, which is an 18% increase from Friday.