GOOGL Tests Resistance as Microsoft Lifts the Nasdaq

Microsoft’s strong earnings gave technology stocks a fresh catalyst.

Azure revenue grew by 43%, while Microsoft remained free-cash-flow positive despite spending heavily on AI infrastructure. This helped lift the Nasdaq and improved sentiment towards other large technology companies, including Alphabet.

However, that sector rally has now carried GOOGL into major resistance between $337 and $349.

The zone combines previous support with the lower portion of the falling daily 20-EMA band.. Above this, the band’s upper boundary overlaps with a previous wick zone between $352 and $360, where earlier rallies have repeatedly been rejected.

A close above $349 could extend the recovery into this higher zone. However, if GOOGL struggles while the wider Nasdaq holds firm, it would indicate that Alphabet is beginning to underperform the technology sector.

Why could GOOGL reject?

Alphabet’s recent growth was strong as per its Q2 2026 earnings call.

Search revenue increased by 17%, while Google Cloud revenue surged by 82% as demand grew across core GCP, AI infrastructure and enterprise AI services.

The concern is how much Alphabet must spend to deliver that growth.

Quarterly capital expenditure reached $44.9 billion, exceeding its $39.1 billion in operating cash flow. This pushed free cash flow to negative $5.9 billion, while Alphabet raised its full-year capex outlook to between $195 billion and $205 billion.

Negative quarterly free cash flow does not mean Alphabet is unprofitable. However, it leaves less cash available for buybacks and other shareholder returns while increasing pressure on the company to prove that its AI spending can generate sufficient future cash flow.

Alphabet also raised roughly $9 billion by issuing new GOOGL shares at $355.20 in June. The offering has already been absorbed, so this price does not guarantee a rejection. However, it gives the $352–$355 area another important market reference.

The subsequent read is as follows:

• Failure to close above $349, followed by a break below $337, could bring the daily 200 EMA around $319–$323 into focus.
• The deeper $296–$304 support zone only becomes relevant if the 200 EMA breaks.
• A sustained move above $360 would invalidate the rejection setup.

Microsoft created the catalyst. Alphabet must now prove that its growth can justify the cost of delivering it.