Smart Money Doubles Down on Alphabet: Another Massive Bullish Bet Targets 50% Upside | Smart Money Option
Investor concerns surrounding Alphabet have recently centered on one issue: AI spending.
As the company continues ramping up investments in AI infrastructure and compute capacity, some investors worry that rising capital expenditures could pressure margins and delay earnings growth.
Yet while those concerns dominate the narrative, the options market is telling a different story.
On Wednesday, both $Alphabet-C (GOOG.US)$ and $Alphabet-A (GOOGL.US)$ saw massive long-dated bull call spread transactions. The trader bought 2,000 December 2028 $440 calls and sold 2,000 December 2028 $520 calls in GOOG, while simultaneously establishing a similar position in GOOGL by buying 2,000 December 2028 $440 calls and selling 2,000 December 2028 $530 calls.
All four trades were marked as Opening, Cross and Multi-Leg transactions, indicating newly established institutional positions.
The combined premium exceeded $48 million. After accounting for the short-call legs, the trader still committed roughly $8.7 million in net premium while controlling more than $280 million in notional exposure.
More importantly, these options do not expire until December 2028.
This is not a bet on the next earnings report, a Fed rate cut, or a short-term AI catalyst. Instead, it appears to be a multi-year wager on Alphabet's earnings growth and valuation re-rating.
With Alphabet trading near $360, the spread targets a profit zone around $520 to $530, implying roughly 46% to 48% upside over the coming years.
Notably, this is the second major bullish Alphabet options trade in as many days.
Earlier this week, an institutional investor sold 8,930 September 2026 $360 puts, collecting approximately $19.65 million in premium. The trade was also marked as Opening, suggesting a newly established position despite market concerns over Alphabet's AI infrastructure spending and potential financing plans.
Taken together, the two trades paint a consistent picture.
While investors continue debating whether Alphabet's AI investments are becoming too expensive, some sophisticated traders appear to view the recent weakness as an opportunity to build long-term bullish exposure.
Unlike $NVIDIA (NVDA.US)$ , $Advanced Micro Devices (AMD.US)$ and $Micron Technology (MU.US)$ , which have become the market's preferred AI beneficiaries, Alphabet still faces skepticism around AI monetization and competitive pressure. These trades suggest at least some institutional investors believe that skepticism may be overdone.
While no single options trade guarantees future stock performance, consecutive large-scale bullish positions often provide valuable insight into where smart money sees opportunity.
For now, at least one institution appears willing to bet that Alphabet's AI story is far from over—and that the stock could still have nearly 50% upside ahead.
Rebound Strategies with Bull Call Spreads:
Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Opening new options positions close to or on their expiration date comes with substantial risk of losses for reasons that include potential volatility of the underlying security and limited time to expiration. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period. Certain complex option strategies carry additional risk, including potential losses that may exceed the original investment amount. If applicable, supporting documentation for any claims will be furnished upon request.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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