Google Had Its Worst Day Ever, and Every Analyst Still Says Buy

Google just had the worst day since it went public, down about 12% roughly half a trillion dollars of value gone in one session. Only one company has ever lost more in a day, Nvidia on deep seek day. And it wasn't the business, cloud revenue more than doubled. It's the bill. Alphabet spent 51.4 billion in 3 months building out AI. That's more than double a year ago. Free cash flow went negative $9 and they say spending will go up again in 2027. Now here's what caught my eye. Seven analysts cut their targets this morning. Every single one is still above the current stock price. The lowest UBS is still at 332. That's 17% higher than where we're at right now. The average of the seven is about 377, about 33% above where we're at. And here's the math. They cut about 9% on average. The stock fell 12%. So after the worst day in Google's history, these analysts still see more upside than they did before the report. So is the options market buying the fear or buying the dip? Let's check it out on today's edition of options math check. So we're in the platform, tastytrade platform here and yeah, Google is down 12.87% 41 points. You don't see this everyday people. And I was actually looking at what the implied move was yesterday. So what you can do, a little hack here, is if you missed what the implied move and then you're seeing the move, you can go to the previous day's close which is about 324.89 exactly. So we can just go to 325 strike, go to the one day, the 325 strike, look at the straddle price which would have reflected the expected move, and then look at the net change on these options. So we've got a $10 reduction here on the calls that are now worthless and you've got a 32 point implied move here on the puts. Now we did increase our sell off here as you can see, but the opening print was at 286. So, 286 is about three four 286.77 is actually four points higher than where we are right now. So, when I look at this net change of minus 10 plus 32, that's 22 points of net change, but then we have to reduce that 22 points by another four points because we've increased our sell-off intraday and that's not going to be reflected in the short calls. So, all that to say, look at the last closing price, look at the current opening price for today, and then look at the previous closing price straddle, and look at the net change. So, we're looking at about a 16-point implied mover what that was yesterday going into today, and we're at a 42-point move to the downside. So, almost a three standard deviation move to the downside, craziness in Google. Question is, are we buying this dip or are we selling? And my simple answer is going to be I'm already in the dip buying category. I think personally, I'm willing to take risk at these levels, especially when you zoom out here and you see, okay, what is the annual low of 2026 for Google? It was at the peak of the war, the annual low was 272. So, we're 10 points away from that. The rest of the market is still pretty strong. So, this move here in Google and some of these other products, actually Amazon reports after the close today, October 29th, and they are selling off a little bit here pre-earnings, but I think when you consider Google is still a MAG 7 stock, Google is still printing cash, although the the bill is a little bit higher, of course, maybe a lot of it higher than it was before, but you've got decreasing implied volatility now now that the binary event is gone. You can see this implied volatility has gone from 40% down to 32%. And I would imagine that we will continue to see reductions in implied volatility, maybe closer to 30% as this kind of dust settles here. But, when you think about the rest of the market, if we have any sort sort of an end to the geopolitical tensions overseas or interest rates kind of coming back down or maybe the hikes kind of wavering, tapering off, you could see this market rip higher. And what products would I want to be in into a market that's ripping higher? I would want to be in those Mag 7 stocks at the very least, the Mag 7 stocks that have been beaten up over the last couple of months. And Google is now one of those products. So, interesting move here. Now, that again, that's not without risk. I think strategically you still got to keep your risk small. You can't put all your eggs in one basket. Google could continue selling. It go could go from 280 to 240 to 200. Like anything can happen here. So, make sure whatever you're doing is well within your risk tolerance. Um but, I think when you look out in time, let's go to January of 2027. And let's let's just look at these considerations. 330 was one of the calls there around 330. We can also look at 370, which was uh another call in terms of the analyst average. If you look at the implied volatility of those ranges, 330 is basically one standard deviation, well within probability of reaching there over the next 78 days. 14% probability of being above 330 at the expiration of January. So, definitely not not zero. 370, especially after a move like this, going to be much less probable over the next 3-4 months. You can see here we have a two standard deviation range at one at 370. But, if you go further out in time, and this is going to be my final point here, the further out in time you go, the wider these implied ranges get because you have so much more time to be correct on an assumption like that. The 370 now is within the implied standard deviation range of the December 2027 cycle, so the end of next year. So, my point is when you get these massive moves that are two, three standard deviation moves in a Mag 7 stock, you don't see this every day. Again, this is Google's one of Google's worst days ever and it's a huge market cap move. I think if we get a turnaround in these markets and you start to see some complacency in the VIX futures settling down, the VIX settling down, and the market starts to go higher, I think the general public is probably going to be looking at Google as one of those products, too, because it is now one of the cheapest products of the Mag 7 on a relative basis when you look at year-to-date returns in 2026. So, all that said, plenty of opportunity here to the upside and downside. Seeing a big move here, uh I think you got to be careful over the next couple of days because the near-term probabilities, the near-term implied volatility, is reflecting a four-day move a four-point move, a seven-point move, an eight-point move over the next week, and we're seeing a 40-point move today. So, be really careful if you're doing near-term stuff. Again, keep your risk small and uh stay strategic. Put yourself in a situation where even if you're wrong, it's not going to be the the end of uh the portfolio for you. But, let me know what you think. Are we going up to 330, which is about 50 points higher in Google, or are we going 50 points lower first, down to 230? 330 or 230 first? Let me know in the comments below. Please like this video, subscribe to the tastytrade channel, and we'll see you on the next episode of Options Math Check.