With a major round of tariffs due later Wednesday, we are expected it bring clarity and remove uncertainty from the markets, potentially sparking a rally in beaten-down growth stocks like Alphabet (GOOGL) . Recently, GOOGL has been under pressure, but its attractive valuation and strong fundamentals position it to capitalize from a more stable market. The resolution of tariff uncertainty could alleviate concerns around global trade disruptions, benefiting GOOGL’s international revenue streams and advertising business. With the stock bouncing off key support, GOOGL is poised for a potential rally, making it an appealing opportunity for those seeking exposure to a high-quality growth name in a recovering market. The timing for adding bullish exposure to GOOGL is optimal, as the stock recently bounced off its $152 support level, coupled with positive divergence with momentum. This suggests that sellers are getting exhausted and indicates the potential for a swift rally, particularly as market uncertainty around tariffs diminishes. GOOGL trades at a significant discount to its industry, despite growth metrics that are in line with the industry and superior profitability, making it an attractive investment as market conditions improve. Forward PE Ratio: 17.6x vs. Industry Median 21.3x Expected EPS Growth: 13.84% vs. Industry Average 13.09% Expected Revenue Growth: 11.01% vs. Industry Average 11.46% Net Margins: 28.60% vs. Industry Average 15.06% Bullish Thesis Tariff Clarity: The tariffs due on April 2, 2025, are expected to bring clarity, removing uncertainty from the markets and providing a catalyst for beaten-down growth stocks like GOOGL to rally. Strong Fundamentals: GOOGL’s attractive valuation, with a forward PE of 17.6x compared to the industry average of 21.3x, and superior net margins of 28.60%, position it for outperformance. Global Exposure: A resolution of tariff uncertainty could benefit GOOGL’s international revenue streams, particularly in its advertising business, which has been impacted by market uncertainty The trade To capitalize on a potential swift bounce in GOOGL, I’m Buying a May 16, 2025 $160/175 Call Vertical @ $4.96 Debit. This entails: Buying the May 16, 2025 $160 call @ $6.95 Selling the May 16, 2025 $175 call @ $1.99 The maximum reward is $1,004 if GOOGL is above $175 at expiration. The maximum risk is $496 if GOOGL is below $160 at expiration. The breakeven point for this trade is $164.96 View this Trade with Updated Prices at OptionsPlay This strategy positions investors to benefit from GOOGL’s anticipated rally, leveraging its technical bounce and the potential for tariff clarity to drive growth stocks higher. With GOOGL’s undervalued fundamentals, this call vertical offers a compelling opportunity to profit from the stock’s upside potential with limited risk. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited! DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
