Alphabet is currently facing two key market concerns: a halt to share buybacks and a pullback in its stock price after a rapid rise. Although the company's revenue continued to grow in the first quarter, investors are beginning to reassess the impact of equity incentives on total share capital. Whether Google can hold its position in the $350-$360 range is a key short-term focus.
Revenue continued to grow in the first quarter
Alphabet's first-quarter revenue was $109.9 billion, up from $90.2 billion in the same period last year. Google Services remained the primary revenue source, and Google Cloud continued its expansion.
From a fundamental perspective, the company's operating performance has not weakened significantly. However, the market focus has shifted from revenue growth to return on capital and changes in share capital.
Equity incentives bring dilution pressure
Alphabet's total recognized stock-based compensation expense in 2025 is $27.1 billion, of which approximately $24.1 billion corresponds to awards expected to be settled in company stock.
This means that even if the core business continues to grow, ongoing restricted stock and other equity incentive arrangements could still increase the number of outstanding shares. If the pace of share buybacks slows down or stops, the mechanism originally intended to hedge against dilution will weaken, and the market will therefore pay more attention to the possibility of pressure on earnings per share.
$350 to $360 becomes a short-term observation zone.
Looking at the price action, Google's price rose from below $280 to around $400 between early April and May, before pulling back. The current price is approaching the $350-$360 range, which is considered a potential support level by the market.
Chart analysts believe this area is important because it corresponds to the previous gap-up level. If the stock price stabilizes in this area, it indicates that previous buying pressure remains; if it continues to fall below this level, the area around $350 may become the next, more definitive test level.
Furthermore, GOOG has recently fallen below some short-term moving averages, indicating a weakening of short-term momentum. However, from a longer-term perspective, the stock price remains above some medium-term support levels, including the area near the 50-day moving average and trend lines at lower levels.
Overall, Alphabet's current situation is not driven by deteriorating fundamentals, but rather by the market reassessing the extent of the pullback after the rally and the dilution pressure from the suspension of buybacks. Whether the $350-$360 range can hold will be a direct signal of whether buying interest will return.
