Just for fun ………
Right now we are in a buy high and sell HIGHER market
So we have been talking about volatility and the difficulty to trade protection or options on stocks.
Why is it difficult? Based on emotion or news usually
Spread widen and the fill prices suck
Volatility DOES work in your favor
Volatility and using the Short Call as Protection =
POTENTIAL PROFITS vs Profitable Today
Difference in the two strike prices is the selling price at options expiration
Let’s work some numbers
$350-450 = $100
Maybe if I close now I could make $77.35 booking $44,720.00
What do I leave on the table = 100 – 77.35 = $22.65 *1000 = $22,650
MU closed today $1035.50 which means MU has to lose $585.50 before we would lose any money for the possible max profit
510/600 Jun = $90 of potential profit = $90K – closer to 88K
Currently at a profit of 12,376
Cost basis $14, 374.00
Max profit 90 – 14,374 = $75,626.00
We aren’t in trouble until MU trades below $600 or loses 435
710/800 bull call which has a potential closing price $90
Cost basis $8,700 worth 12,465 = $3765
Potential profit = 27,000 closing amount – 8,700 = $18,300
$450.00 – 340.00 = $110 closing price
Maybe if I close now I could make $90.61 booking $64,310.00
What do I leave on the table = 110 – 90.61 = $19.39 *1100 = $21,329
MU closed today $1035.50 which means MU has to lose $585.50 before we would lose any money for the possible max profit
$350-450 = $100 closing price
Maybe if I close now I could make $77.35 booking $44,720.00
What do I leave on the table = 100 – 77.35 = $22.65 *1000 = $22,650
MU closed today $1035.50 which means MU has to lose $585.50 before we would lose any money for the possible max profit
$600-510 = $90
Maybe if I close now I could make $53.50 booking $12,376.00
What do I leave on the table = $90 – 53.50 = $36.50 *1000 = $36,500
MU closed today $1035.50 which means MU has to lose $435.50 before we would lose any money for the possible max profit
710/800 bull call which has a potential closing price $90
Cost basis $8,700 worth 12,465 = $3765
Potential profit = 27,000 closing amount – 8,700 = $18,300
Earnings –
MU 6/23 est
https://www.briefing.com/the-big-picture
The Big Picture
Last Updated: 21-May-26 17:26 ET | Archive
A tactical and practical anti-war trade
Briefing.com Summary:
*A 10-yr note yield and average gas prices with a 5-handle on them would be a problem for the stock market.
*Walmart suggested the consumer’s spending tank isn’t full anymore.
*A credible Iran peace deal could spark an “anti-war trade” favoring value stocks, long-duration bonds, small caps, and foreign markets.
Memorial Day is a federal holiday to honor the men and women who have lost their lives in the line of military duty defending the interests of the United States of America. With the Iran war, several more names have been added to that heroic roster.
Some have disputed that we are still at war with Iran given the tenuous ceasefire agreement that has been in place since April 7, something Vice President Vance called at the time a “fragile truce.” President Trump has threatened on more than one occasion since then, however, that the U.S. is ready, willing, and able to resume its military strikes on Iran if it does not agree to a peace proposal outlined by the United States.
Those threats, though, have been tempered each time by a stroke of patience to see if Iran will acquiesce to terms that dictate, among other things, no development of nuclear weapons and adherence to the safe and free passage of ships through the Strait of Hormuz.
Pakistan has been acting as the primary mediator working to end the war. We’d like to thank Pakistan for its service, but its services are no longer needed. The market will take it from here.
Art Class
In early March, we drew several red lines to an off-ramp for the war with Iran. Briefly, they were $100/bbl oil, average gasoline prices with a 4-handle, a 10-yr note yield of 4.50%, and an S&P 500 that trades below 6,300.
It was some good artistry. The aforementioned ceasefire agreement was struck not long after all those red lines had been reached or were quite close to being reached. To be fair, the S&P 500 didn’t go below 6,300, but it did hit 6,316, so we’ll stake a claim on that being close enough.
What has unfolded in the capital markets since the ceasefire was struck has been remarkable, both in good and bad ways.
- The major indices all have soared to new record highs (good).
- Q1 EPS growth has been stellar at 28.4% and the forward 12-month EPS estimate has increased from $332.27 to $350.62 (good).
- The 2-yr note yield has risen above the fed funds rate, the 10-yr note yield has gone as high as 4.67%, and the 20-yr bond yield hit a 19-year high of 5.19% (bad).
- WTI crude prices have continued to hang around $100/bbl, as traffic through the Strait of Hormuz has remained mostly at a standstill and daily reports suggest oil stockpiles are facing depletion.
- CPI inflation is up 3.8% year-over-year, PCE inflation is up 3.5% year-over-year, and PPI inflation is up 6.0% year-over-year (bad).
These are items we have highlighted in recent columns, so there is no need to expound on how/why this has all come to pass. What we need to expound upon today are the newest red lines the market is painting for the Trump administration to get this peace deal signed, sealed, and delivered.
The Newest Red Lines
The featured artists this time include the Treasury market, gas prices, and Walmart (WMT). We’ll begin with the Treasury market.
Treasury yields have risen appreciably since the start of the Iran war. The 2-yr note yield has moved from 3.38% to as high as 4.10%. It is currently at 4.08%. The 10-yr note yield has gone from 3.96% to as high as 4.67%. It is currently at 4.58%.
Those moves are an expression of inflation concerns and have been tinged with fiscal concerns. The direction of travel in Treasury yields hasn’t undermined the stock market yet, but a 10-yr note yield with a 5-handle on it would. That is a red line starting to brighten, not only because the 10-yr flirted with 4.70% but also because it got there with some pace.
Notwithstanding talk of possibly suspending the federal gas tax, the national average for regular gasoline prices stands at $4.56, according to AAA, up from $4.02 a month ago and $3.18 a year ago. The current range of prices across the U.S. shows a low of $4.02 and a high of $6.14.
There is sticker shock around the country when the pump shuts off, and the longer it persists, the greater the risk becomes that there will be a broader slowdown in consumer spending and potentially a broader takedown of GOP candidates in closely contested midterm elections.
This is another area where a 5-handle won’t fly for the market.
Walmart fired a warning shot about the higher gas prices when it released its fiscal Q1 results and provided fiscal Q2 guidance. The company’s CFO asserted that tax refunds might have mitigated the effects of high gas prices in the first quarter before adding that those refunds are now waning, which will create more spending pressure for consumers in the second quarter.
He highlighted how the average number of gallons of gas customers are putting into their tanks at Walmart stations has fallen below ten for the first time since 2022. In other words, there is added budget stress for Walmart’s customers, particularly its lower-income customers, many of whom are experiencing a decline in real earnings due to inflation rates exceeding nominal income growth.
Few companies have their finger on the pulse of the U.S. consumer more so than Walmart, so when it makes a point of calling attention to the struggles high gas prices are causing for many of its shoppers, it is a point not to be glossed over when it comes to forecasting economic and earnings growth prospects—at least not if gas prices stay where they are or, egads, move even higher.
Briefing.com Analyst Insight
These red lines all get drawn back to the consumer, who is the linchpin of the U.S. economy. The closer they get to being crossed, the worse off the economy will be. The stock market, then, will become a casualty of this war, and that is not something that will be tolerated—not for long, anyway—by President Trump.
The real wildcard in this is Iran. The Trump administration might market the equivalent of a “mission accomplished” message, but if Iran isn’t fully buying into such a message, then the red lines might not fade from view so easily on a “peace deal.”
A deal that is stamped with credibility on both fronts, however, should go a long way toward turning red lines into green figures on stock monitors. We’ll call it the anti-war trade, as opposed to the peace trade, because the stock market has fared just fine with the U.S. on a wartime footing, thanks in large part to the mega-cap stocks, the semiconductor stocks, and the energy stocks.
The anti-war trade, then, should feature countertrend positioning that would reward value over growth; long-duration bonds over short-duration bonds as energy-driven inflation fears ease; foreign markets over the U.S.; small-cap over large-cap; consumer discretionary over energy; and the S&P 493 over the Magnificent 7.
It doesn’t have to be a zero-sum game in any of these instances, but the relative strength should accrue to areas that have exhibited relative weakness since the Iran war began.
It would be a tactical and practical trade, which just might have some legs to it if the peace is real and the capital markets continue to celebrate V-E Day. That being victory in earnings.
—Patrick J. O’Hare, Briefing.com
Where will our markets end this week?
Higher
DJIA – Bullish
SPX – Bullish
COMP – Bullish
Where Will the SPX end June 2026?
06-01-2026 +0.0%
Earnings:
Mon: HPE,
Tues: DG, ULTA,
Wed: M, AVGO, CRWD, FIVE, PVH,
Thur: DOCU, LULU
Fri:
Econ Reports:
Mon: Consumer Spending, ISM Manufacturing
Tue: JOLTS,
Wed: MBA, ADP, Business Inventories, Factory Orders, ISM Services, Beige Book,
Thur: Initial Claims, Continuing Claims, Productivity, Unit Labor Costs,
Fri: Average Workweek, Non-Farm Payroll, Private Payroll, Unemployment Rate, Hourly Earnings, Consumer Credit,
How am I looking to trade?
Rolled up OTM puts to closer to ATM or slightly OTM
Adding Covered Calls to positions for the summer doldrums
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
Jeff Bezos rejects AI-induced job-loss fears, says the technology will ‘elevate’ workers
Amazon founder Jeff Bezos has dismissed growing concerns that artificial intelligence (AI) will wipe out jobs, arguing instead that the technology will help workers become more productive and strengthen the wider economy.
Speaking during an interview with CNBC, Bezos said he believes AI will eventually create a labor shortage rather than mass unemployment.
According to the Amazon founder, fears…
Micron hits $1 trillion market cap for the first time as stock surges 19%
Published Tue, May 26 202610:45 AM EDTUpdated Tue, May 26 20264:02 PM EDT
Key Points
- Micron topped a $1 trillion market value for the first time on Tuesday.
- Shares popped after UBS nearly tripled its price target on the stock.
- Micron is among a new group of chipmakers benefiting from the shift to agentic AI.
Micron topped a $1 trillion market value for the first time on Tuesday as shares popped 19%, driven by insatiable artificial intelligence demand for its memory chips.
The stock surge came as UBS tripled its price target on the stock from $535 to $1,625 a share, citing long-term agreement opportunities with partially fixed pricing.
“We believe the market will start to put a more ‘normal’ multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex,” the firm wrote.
The new price target suggests shares could more than double from Friday’s close.
Micron is among a fresh crop of chipmakers benefiting from the next stage of the AI race. Investors are snapping up stocks tied to central processing units and memory, needed to run and process agentic workloads, in a battleground once dominated by Nvidia.
Explosive demand for AI has led to a global memory shortage that chipmakers like Micron are struggling to fill. That’s allowed Micron and peers SK Hynix and Samsung to hike prices. Micron’s stock has more than tripled year to date.
Just a few weeks ago, Micron surpassed a $700 billion market valuation and soared into the ranks of most valuable U.S. tech firms.
Intel, after missing out on the early AI rally, is up more than sixfold and trading near all-time highs. The American chipmaker is in the middle of a major turnaround following a significant investment from the U.S. government last summer.
Qualcomm, Advanced Micro Devices and Marvell Technology have also reached new highs.
Samsung strike risk: Worst has been avoided, but competitiveness takes a hit
Correction: UBS tripled its price target on Micron from $535 to $1,625 a share. An earlier version mischaracterized the move. Just a few weeks ago, Micron surpassed a $700 billion market valuation. An earlier version misstated the figure.
‘The Mandalorian and Grogu’ is Disney’s lowest-ever Star Wars film opening
Published Sun, May 24 202612:04 PM EDT
Key Points
- Walt Disney’s “Star Wars: The Mandalorian and Grogu” tallied an estimated $82 million in domestic ticket sales through its first three days in theaters.
- It is the lowest opening haul for a Star Wars title ever released by Disney.
- However, the company isn’t just relying on ticket sales: Other avenues for revenue growth include merchandise, its streaming service and theme parks.
Walt Disney’s “The Mandalorian and Grogu” jettisoned into theaters Friday, marking the first time in seven years that a new Star Wars film has launched on the big screen.
Sunday estimates indicated that the film, based on the hit Disney+ show “The Mandalorian,” surpassed initial box office projections, tallying $82 million in domestic ticket sales through its first three days in theaters. Official numbers will be released on Monday.
While “The Mandalorian and Grogu” outpaced the $80 million that most box office analysts predicted, it has so far tallied less than 2018′s “Solo: A Star Wars Story,” which at $84 million was the previous lowest-opening Star Wars project in the era of Disney Star Wars releases, according to data from Comscore.
Analysts foresee the film exceeding $100 million domestically for the four-day Memorial Day holiday weekend. Internationally, “The Mandalorian and Grogu” snapped up around $63 million in ticket sales.
The film benefited from premium large format screenings like IMAX and Dolby Cinema, as 41% of tickets were sold for these upgraded, more expensive showings, according to data from EntTelligence. Standard tickets for the film averaged $16.01 apiece, while premium tickets cost an average of $19.43 each, the data company reported.
However, the film’s box office isn’t the only metric that Disney will be keeping an eye on. The company’s strategy doesn’t just rely on ticket sales — it has other avenues for revenue growth, including merchandise, its streaming service and theme parks.
Star Wars generates more than $1 billion in retail sales each year, even without a new title arriving in theaters.
Additionally, “The Mandalorian” series is the most-watched original show on Disney+, with more than 1.3 billion hours watched globally. Viewership of the series and other Star Wars titles have gotten a bump on the platform in recent weeks because of the release of “The Mandalorian and Grogu.”
At its domestic theme parks, the company updated its “Millennium Falcon: Smuggler’s Run” ride to feature a new mission featuring Grogu in the cockpit. At the same time the BDX droids featured in the film have reappeared in Disneyland’s Galaxy’s Edge themed area. Also, through its close partnership with developer Epic Games, Fortnite has introduced new environments, characters, vehicles and purchasable cosmetics for gamers.
Jeff Bezos says bottom half of earners should pay zero in income taxes
Published Wed, May 20 20269:12 AM EDTUpdated Wed, May 20 202612:43 PM EDT
Kelli Grant, CFP®@in/kelli–grant/@KelliGrant.money@kelligrant
Key Points
- Income tax paid by lower earners is “a small amount of money for the government,” Amazon Executive Chairman Jeff Bezos told CNBC’s Andrew Ross Sorkin on Wednesday.
- The bottom half of taxpayers had an adjusted gross income of nearly $54,000 in 2023, according to the Tax Foundation, citing the most recent IRS statistics.
- Bezos’ comments come as a number of Democratic states explore higher taxes on the wealthy, and federal lawmakers have introduced proposals to cut taxes for lower earners.
Jeff Bezos: I don’t want to reduce taxes for the working class, I want to eliminate it
Amazon Executive Chairman Jeff Bezos on Wednesday called for zero federal income taxes on the bottom half of earners.
The top 1% of taxpayers pay about 40% of all the tax revenue, and the bottom half pay 3%, Bezos told CNBC’s Andrew Ross Sorkin on “Squawk Box.”
“I don’t think it should be 3%,” Bezos said. “I think it should be zero.”
The bottom half of taxpayers had an adjusted gross income of nearly $54,000 in 2023, according to the Tax Foundation, citing the most recent IRS statistics. By contrast, households in the top 1% earned at least $676,000 of income that year.
Bezos said the income tax paid by lower earners is “a small amount of money for the government,” and offered the hypothetical example of a healthcare worker who makes $75,000 a year.
“We shouldn’t be asking this nurse in Queens to send money to Washington,” he said. “They should be sending her an apology. It really makes no sense.”
He said he would “advocate” for such a change, but did not offer details on how lawmakers might enact it.
Bezos is the world’s fourth-richest person, with a net worth around $269 billion, according to Forbes.
Tax burden on low earners
Bezos’ comments come as a number of Democratic states explore higher taxes on the wealthy.
Several federal lawmakers have also recently introduced proposals to cut taxes for lower earners. Sen. Corey Booker, D-N.J., proposed the Keep Your Pay Act, which calls for the first $75,000 of income to be tax-free for households filing joint tax returns, with proportional tax relief for single filers and heads of households.
“No income tax on the first $75,000 families earn would be a game changer for working people,” said Booker in a statement announcing the proposed legislation on March 9. “This tax cut would immediately put more money in your pocket every month to deal with the high price of everyday expenses, an unexpected emergency, or to plan for the future.”
Sign Up for Our NewsletterYour Wealth
Weekly advice on managing your money
Get this delivered to your inbox, and more info about our products and services.
By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.
The average income tax rate in 2023 was 14.1%, according to a Tax Foundation analysis of IRS data. The top 1% of taxpayers paid an average rate of 26.3%, seven times higher than the 3.7% average rate paid by the bottom half of taxpayers.
There were more than 76 million households in the bottom half in 2023, according to the Tax Foundation. They paid $913 of federal income taxes, on average, that year.
However, when counting refundable tax credits, the bottom 40% of taxpayers already pay no income tax, on average, said Erica York, vice president of federal tax policy for the Tax Foundation.
‘A tale of two economies’
While the bottom half of earners have a lower tax burden, their struggles have been more pronounced amid higher inflation and broader concerns about affordability.
The so-called K-shaped economy illustrates Americans’ diverging experiences: Higher-income households continue to benefit from rising markets and wages, while many lower- and middle-income consumers struggle with higher costs and financial strain.
Federal Reserve Bank of New York research shows that the expiration of pandemic-era subsidies for low- and middle-income households created a noticeable divergence in 2023. More recently, sharply higher gasoline prices amid the Iran war are exacerbating the K-shape, researchers found. Lower earners spend a greater share of their incomes on gasoline relative to higher earners.
“I think what’s going on is that it’s kind of a tale of two economies, so you have a bunch of people in this country who are doing really well, but you also have a bunch of people in this country who are struggling,” Bezos said.
Do the rich pay their fair share?
The notion of whether the wealthy pay their fair share of taxes relative to lower earners has long been a subject of fierce debate.
Critics of raising taxes on higher earners often point to the progressive nature of the federal tax code.
For example, the top 1% of taxpayers accounted for nearly 21% of total adjusted gross income in 2023 — but paid a much larger share, about 38%, of all federal income taxes that year, according to the Tax Foundation, citing IRS data.
Meanwhile, the bottom half of taxpayers accounted for 12% of total income, but just 3% of total income taxes paid.
Placing a higher tax burden on the rich may reduce the amount of money that they save and invest, according to Thomas Savidge, a research fellow at the American Institute for Economic Research, a free market think tank that promotes limited government.
That saving and investment activity generally “creates access to capital for all, allowing people to create and innovate, making everyone wealthier,” he wrote in 2025.
However, high earners often use the “intricacies of the tax code” to cut their IRS bills, and they pay an effective rate that is “far less” than the rate they must pay on paper, according to a 2024 report by the Yale University Budget Lab.
That said, tax burdens can range widely even among the richest households, it found.
For example, some taxpayers in the top 1% pay an effective tax rate of 3% while others pay as high as 45%, according to the Budget Lab’s analysis.
Some groups in favor of raising taxes on the wealthy say that the U.S. tax system isn’t as progressive as it may seem, when taking a more holistic view of household taxes beyond the personal income tax.
Payroll taxes are the biggest levy that many people pay, and those for Social Security aren’t owed on income above $184,500, according to a recent blog post by Jessica Vela, a federal policy analyst at the Institute on Taxation and Economic Policy, a progressive think tank. Million-dollar earners stopped paying into Social Security for 2026 in early March, the Center for Economic and Policy Research estimated.
Low earners also spend a greater share of their income on sales taxes at the state and local level relative to higher earners, contributing to a more regressive tax system, Vela wrote.
When accounting for all federal, state and local taxes paid by U.S. households, the top 1% account for 24% of total tax revenue — only slightly higher than their share of reported income, 20%, according to an ITEP analysis in 2024.
This doesn’t account for so-called unrealized capital gains, or the untaxed profits from stocks and other assets that are disproportionately owned by the wealthy, according to the analysis.
— CNBC’s Jessica Dickler and Kate Dore contributed reporting.
Google I/O primer: Alphabet’s AI showcase is its chance to wow Wall Street
Published Mon, May 18 20266:21 PM EDTUpdated Mon, May 18 20269:04 PM EDT
MacKenzie Sigalos@KENZIESIGALOS
Key Points
- Google I/O kicks off Tuesday at a time when Wall Street has already repriced Alphabet as a full-stack AI winner.
- Investors are watching a number of key areas, from the next Gemini model to agentic commerce and its in-house AI chip, the TPU.
- The bull case heading into I/O is that nearly every winner in the AI economy may need Google somewhere in its supply chain, from chips and cloud to the models running on top of both.
Why Alphabet has an advantage in the AI race
Alphabet’s stock is up 140% over the past year, with a cloud business that is growing faster than Amazon’s and Microsoft’s.
But 18 months ago, the Google parent looked like it had spent a decade preparing for the artificial intelligence era, only to watch OpenAI define the market.
Now, Wall Street is valuing Alphabet like one of the few companies positioned to profit from every layer of the generative AI boom.
Google I/O, which begins Tuesday, has always been its venue for showing developers where the company is headed. This year, the stakes are higher.
Wall Street has already rewarded Alphabet for its AI comeback, but investors want to see whether that confidence is backed by a real product roadmap across key areas like search, cloud, Android, chips and enterprise software.
“Google is probably the best-positioned company to monetize AI at scale because it controls almost every layer of the stack,” said Lo Toney, founding managing partner of Plexo Capital and an early investor in Anthropic. “We’ve never really seen a company that has that complete vertical integration from top to bottom to be able to support AI.”
Gene Munster, managing partner at Deepwater Asset Management, said the advantage in having that many layers of control is not just scale, but speed.
“There is a benefit to owning the full stack in terms of the speed that you can innovate,” Munster said. “When you’re building on your own custom silicon, for example, that’s an advantage of speed. When you have access to power, you can get data centers up more quickly. That’s a speed advantage, which is important.”
Here are seven key areas investors are watching for at Google I/O:
What’s next for Gemini
The most closely watched announcement will be whether Google unveils a next-generation Gemini model.
Reports ahead of I/O have pointed to a potential Gemini 4 debut, though analysts are not fully counting on it. Citi noted that with Gemini 3.1 Pro released in February, Google has been on a roughly three-to-four month launch cadence, making a Gemini 3.2 or 3.5 update more likely than a full generational leap.
That makes the Gemini 4 question more than a version number. A step up would give Google a cleaner answer to OpenAI and Anthropic. Mizuho wrote that a Gemini 4 announcement “would push Google back up to the bleeding edge of the frontier,” while just another generation 3 update would read more like catch-up.
The broader Gemini ecosystem update will also be key.
Mizuho analysts said they’ll specifically be watching for progress on Project Astra, Google’s universal AI assistant, along with deeper Gemini Live capabilities, screen sharing, video understanding and native tool use across Search, Gmail, Calendar and Maps. Updates to Gemma, Google’s open-source model family, and Gemini Robotics are expected, as well.
The usage numbers heading into the event are already stronger than they were a year ago. Paid Gemini Enterprise monthly active users grew 40% in the first quarter over the previous quarter. The Gemini app saw U.S. monthly active users grow 127% year-over-year in April, according to Citi data. Token consumption hit 16 billion per minute as of Google Cloud Next.
AI agents
If there is one theme running through the I/O session lineup, it is agents.
Google has sessions on agentic coding workflows, multimodal tools, media generation, robotics and AI agents. The goal is to position Gemini as not just a chatbot but more of an operating layer across Google’s products, capable of understanding context and taking action.
“It’s who wins the office copilot market,” Toney said. “If the bigger market becomes AI agents and orchestrating them — inference infrastructure, multimodal workflows, enterprise search — that’s where we see a big opportunity for Google being able to drive Alphabet’s future growth.”
Agentic coding is part of positioning Gemini as a response to Anthropic’s Claude Code and OpenAI’s Codex. That category has become one of the clearest proof points for AI’s commercial value, especially in enterprise software.
Agentic shopping
Commerce may be the bigger opportunity. Google already has search, shopping, autofill and payments; now it wants Gemini to connect them into an agentic checkout experience.
Google has been expanding its Universal Commerce Protocol, adding partners including Meta, Microsoft, Stripe, Klarna and Affirm in recent weeks. I/O is expected to further show how that infrastructure could enable end-to-end agentic checkout, where Gemini does not just answer a shopping query, but completes a transaction.
Sameer Samat, president of Android Ecosystem at Google, described asking Gemini to plan a barbecue, build a menu, open Instacart, add ingredients to a Safeway cart and notify him when the task was done.
“If you add that up multiple times a day across your week, that’s a lot of time back,” Samat said. “Those are the kinds of features that I think people are much more excited about and are much more tangible.”
Toney said Google’s multimodal experience gives it a structural edge as those workflows get more complex.
“Enterprise workflows increasingly include things like video, voice, images, and code,” he said. “Google is uniquely strong across multimodal systems because they have this experience with some of the largest applications that handle them — YouTube, Android, Maps, Search, DeepMind — and then obviously, the TPUs.”
For investors, the agentic commerce push has implications beyond Alphabet. Mizuho flagged that more agentic product development from Google could weigh on marketplaces like Booking Holdings, Expedia, DoorDash, Zillow and Instacart, noting that anticipation of that shift is likely already part of recent weakness in those stocks.
AI Mode
The next question is how Google gets paid for it. AI-enabled campaigns now account for more than 30% of search spend, according to Citi. AI Max, which emerged from beta in April and is set to replace Dynamic Search Ads by September, is showing early results, including stronger conversions with its full feature suite.
Citi noted that AI Mode could help Google monetize longer, more complex queries that historically were harder to turn into ad dollars. But Mizuho points to the tradeoff: AI Mode searches are producing far fewer outbound clicks, with the firm estimating that 93% end without an external click and that organic click-through rates decline 15% on AI Overview queries.
That makes monetization one of the biggest questions heading into I/O. Munster said he will be watching for new ad products inside AI Mode, how Google frames agentic commerce, and what it says about more personalized AI experiences.
Google Cloud
For investors, though, the most consequential I/O announcements may come from cloud and infrastructure.
Cloud has become one of Alphabet’s strongest pillars. It grew 63% year-over-year in the first quarter, outpacing both Azure and AWS. Cloud backlog hit $462 billion, up roughly 90% quarter-over-quarter, with half expected to be recognized over the next 24 months. Gen AI product revenue grew roughly 800% year-over-year.
CEO Sundar Pichai has pointed to several drivers behind that growth, including faster new customer wins, larger commitments and deeper relationships with existing clients.
On the company’s first-quarter earnings call, he said the number of billion-dollar-plus deals signed in 2025 surpassed the previous three years combined, while existing customers were outpacing their initial commitments by more than 30%.
AI chips
The new wildcard is external TPU sales. Google disclosed in the first quarter that it will begin delivering its custom AI chips to outside customers in the second half of 2026, with broader expansion planned for 2027. It is a potentially large new revenue stream, but investors still do not know exactly how to model it.
Mizuho wrote that investors will be listening for any detail on whether external TPU sales are booked as gross sales or royalty revenue, what margins look like and how those deals are accounted for in backlog.
Toney called TPUs one of the most underappreciated parts of the Alphabet thesis, arguing that Google’s in-house chips have allowed the company to build a tightly integrated AI infrastructure that supports not only Gemini and Cloud, but also YouTube, Android and the rest of its ecosystem.
Munster estimates the broader AI chip market is running at roughly a $500 billion annual pace, meaning even modest share gains could become material for Alphabet.
Anthropic
No relationship will draw more scrutiny heading into I/O than Google’s ties to Anthropic.
Alphabet holds a significant ownership stake in the AI startup, and the recently reported $200 billion cloud commitment, if accurate, could represent a major portion of Google’s contracted future cloud revenue.
Google has also committed up to $40 billion in total investment, creating a loop in which capital flows into Anthropic and back to Google through cloud and TPU spending.
That dynamic raises a concentration question that investors have already seen elsewhere in cloud. Oracle’s stock soared after reporting a massive backlog jump tied largely to OpenAI, then sold off as investors grew more nervous about customer concentration. Microsoft faces a similar debate around its OpenAI relationship.
Toney said the Google-Anthropic relationship looks more like a hedge than a weakness.
Even if enterprises choose Claude over Gemini, he said, Google can still benefit from the infrastructure demand behind that usage.
“If enterprises prefer Claude, then Google still wins in infrastructure because all of that activity has to live somewhere,” he said. “Google still wins because of their TPUs.”
