Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.
Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in GOOGL.
Shares of Alphabet Inc. (Ticker: GOOGL) have been one of the laggard names within the ‘Magnificent Seven’ year-to-date. The stock is down on the year, but not after hitting a new all-time high back on February 4. The stock then dropped over 30% into its low on April 7, before starting a rebound. What will it take for bulls to reestablish control of the trend in GOOGL? Or, will bears continue to have their way with this stock?
Willow Chip: A Quantum Catalyst?
Alphabet’s unveiling of the Willow quantum computing chip marks a transformative leap in its business model, extending far beyond its core in digital advertising. With its search function going by the wayside, it needs to bring a new tech to market to keep pushing the innovative envelope.
Alphabet achieved a major breakthrough with Willow, a 105-qubit quantum processor that demonstrates exponential error reduction and unprecedented computational power. This is the type of futuristic technology that could make this stock a top-performing name again.
Willow solved a benchmark calculation in under five minutes that would take a supercomputer 10 septillion years, positioning Alphabet as a leader in quantum computing, with potential to revolutionize AI, drug discovery, and material science.
Alphabet’s diversified revenue streams—advertising, Google Cloud, YouTube, and now quantum computing—reinforce its growth prospects. Willow’s advancements in error correction and qubit stability could accelerate commercial quantum applications, strengthening Alphabet’s AI leadership and cloud offerings. This could drive significant increases in Alphabet’s bottom line, and support its stock price.
Traders looking for a short-term rebound in GOOGL may find a trade with Direxion’s Daily GOOGL Bull 2X Shares (Ticker: GGLL), which seeks daily investment results, before fees and expenses, of 200% of the performance of Alphabet Inc.'s common stock (Ticker: GOOGL).
Below is a daily chart of GOOGL as of May 29, 2025.
Source: TradingView.com
Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.
The performance data quoted represents past performance. Past performance does not guarantee future results.
Will the Feds Break Up Big GOOGL? Traders Take Note
Alphabet’s positioning in quantum computing, and legacy position AI and cloud services has fueled its rise, but significant risks loom. Willow’s reliance on specialized fabrication and global supply chains makes it vulnerable to U.S. export controls on quantum technology to China, potentially impacting billions in revenue.
President Trump’s April 2025 tariffs could disrupt supply chains, eroding margins for Alphabet’s hardware and cloud segments, especially if a resolution isn’t reached by the August 12 tariff deadline.
Additionally, Alphabet faces mounting antitrust risks. Ongoing U.S. and EU investigations into its dominance in search, advertising, and app store practices could lead to substantial fines or restrictions on its business model. A landmark U.S. antitrust ruling is expected in mid-2025, and could mandate a breakup of the holding company, which could significantly impact revenue and investor confidence.
In this situation, Direxion’s Daily GOOGL Bear 1X Shares (Ticker: GGLS), which seeks daily investment results, before fees and expenses, of 100% of the inverse performance in common shares of Alphabet Inc.'s (Ticker: GOOGL) could see a nice rally.
*Definitions and Index Descriptions
An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.
The Funds have derived all disclosures contained in this document regarding Class A shares of Alphabet Inc. from publicly available documents. In connection with the offering of each Fund’s securities, neither the Funds, the Trust, nor the Adviser or any of its respective affiliates has participated in the preparation of such documents. Neither the Funds, the Trust nor the Adviser or any of its respective affiliates makes any representation that such publicly available documents or any other publicly available information regarding Class A shares of Alphabet Inc. is accurate or complete. Furthermore, the Funds cannot give any assurance that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of the publicly available documents described above) that would affect the trading price of Class A shares of Alphabet Inc. have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning Class A shares of Alphabet Inc. could affect the value of a Fund’s investments with respect to Class A shares of Alphabet Inc. and therefore the value of the Funds.
Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.
Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with GOOGL and may increase the volatility of the Bull Fund.
Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with GOOGL and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to GOOGL is impacted by GOOGL’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to GOOGL at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to GOOGL increases on days when GOOGL is volatile near the close of the trading day.
Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with GOOGL and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to GOOGL is impacted by GOOGL’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to GOOGL at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to GOOGL increases on days when GOOGL is volatile near the close of the trading day.
Alphabet Inc. Class A Investing Risk — Alphabet Inc.’s Class A shares face risks associated with reliance on advertising revenue and the effect that loss of partners or new and existing technologies that block advertisements online may have on its business; intense competition for its products and services; investments in new businesses, products, services and technologies that may harm its operating results; slowdowns in its revenue growth rate; the ability to protect its intellectual property rights; the ability to maintain or enhance its brands and its impact on the ability to expand its user base, advertisers, customers, content providers and other partners; manufacturing and supply chain issues; interruptions to, or interferences with, its complex technology and communication systems; its international operations; failure to evolve with the advancement of technology and user preferences; data privacy and security concerns; problematic content posted by users; and regulatory, legal and litigation issues.
Information Technology Sector Risk – The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production costs.
Interactive Media & Services Industry Risk – The prices of technology and media companies, especially those of smaller, less-seasoned companies, tend to be more volatile and less liquid than the overall market. These companies are subject to rapid changes in technology and consumer platform preference, including the increased use of mobile-based apps, competition for advertising revenue, changes in audience preferences, evolving industry standards and frequent new product productions.
Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily GOOGL Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.
