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Is This “Century Loan” a Red Flag for AI?
Is This “Century Loan” a Red Flag for AI?
BY MICHAEL SALVATORE, EDITOR, TRADESMITH DAILY
In This Digest:
- Is Google’s 100-year bond a red flag for the tech rally?
- Tech is down in 2026, but these standouts are a buy
- In the battle of the obesity drugs, the winner is clear
Google wants to borrow some money… for a century…
News broke Monday that Alphabet (GOOGL), Google’s parent company, is preparing to sell a rare 100-year bond.
If it goes through, investors would collect interest each year, and then get their original principal back in 2126.
Online, some traders are already comparing the move to the late-1990s dot-com era, when Motorola issued its own century bond.
Back then, Motorola dominated mobile phones, made key semiconductor components, and sat at the center of the global communications boom. The bond came in 1997, near the peak of that optimism.
Maybe the skeptics are right. Ultra-long bonds tend to show up when confidence runs high, capital is cheap, and lenders are willing to bet far into the future.
What’s not up for debate is the amount of money pouring in to fuel the AI boom.
Google expects to spend $185 billion on AI this year. That comes amid spending guidance from rival Meta Platforms (META) of between $115 billion to $135 billion and planned spending of $200 billion by Amazon (AMZN).
The bond offering and others Google has recently put forward are set to raise $31 billion for the tech giant. Clearly, they want to make good on their spending plans.
So today, instead of joining the online debate about what all this means, let’s turn to the data to answer a more useful question.
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Is GOOGL a buy for the long haul?
Stocks move up and down for two reasons:
- Investor psychology: When investors get excited, they tend to chase prices higher. Then, when fear inevitably takes over, they do the opposite and get scared out of great companies.
- Company fundamentals: Over time, a stock is anchored to one thing: how much cash the business earns and how well it reinvests it.
Investor psychology bounces around a lot over time. Company fundamentals tend to be steadier.
So, since we’re thinking about Google on a 100-year timescale, where does it stand on the latter?
Balance sheets are not what you’d call a light read for most people. So here at TradeSmith, we’ve built a simple-to-use tool that grades the thousands of stocks we track in our database on their most important fundamental metrics.
It’s called our Business Quality Score (BQS). It crunches 21 fundamental factors, such as long-term return on equity, profit margins, earnings volatility, and debt issuance. We group these factors into four buckets: Profitability, Safety, Growth, and Payout. Then our weighting algorithm turns all these numbers into a 0-100 score.
The closer the score is to 100, the better the business. Here’s how Google stacks up:
As you can see, Google gives long-term investors little to worry about with a BQS of 93.
But Google is one of few bright spots in tech right now…
So far in 2026, the SPDR Technology Sector ETF (XLK) – a basket of tech stocks and key measure of the sector – is down 0.6%.
It’s the third-worst performer of the S&P 500 sectors – ahead of the SPDR Consumer Discretionary ETF (XLY) and the SPDR Financial Sector ETF (XLF).
Zooming out, XLK has been the second-best performer since the start of 2023 – up 130%. It’s second only to another tech-packed sector ETF, the SPDR Communication Services ETF (XLC), which is up 144% over that stretch.
That’s only natural in a megatrend like AI, which has rewarded tech firms of almost all kinds for three years now.
So it’s especially worth noting that momentum is breaking down in this key area.
Here’s a quick look at the percentage of stocks in the tech-sector ETF trading with bullish momentum, as measured by our Long- and Short-Term Health metrics:
As you can see, about half of the stocks it covers are trading in both their short-term and long-term Red Zones – TradeSmith’s volatility-based measure of a downtrend.
And that downtrend has been accelerating. Over the past three months, the share of tech stocks in the Red Zone has nearly doubled on both long- and short-term timeframes.
It’s a reminder that you should always be choosy with your investments. A rising tide may lift all boats, but not all boats are strong enough to stay upright.
If you own XLK, you’ve already lost money in 2026. That’s a capsized boat.
If you own GOOGL on the other hand, you’re up about 3%. Sails away.
And some tech sector stocks are trading with new Green Zone signals, indicating fresh momentum surges despite broad declines elsewhere in the sector.
Networking giant Cisco Systems (CSCO), along with AI chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD), have all flashed Green on our Short-Term Health metric in the past week.
They’ve all moved out of the cautionary Yellow Zone on both timeframes as well, suggesting they’re holding up amid the broader volatility.
If you want to own tech, make sure you own stocks that didn’t halt their uptrends in the recent rout. The three stocks above, along with GOOGL, fit the bill.
Obesity drug drama leads to one simple takeaway…
This past Super Bowl Sunday in the U.S. was about the halftime show, the ads, and the football game… in that order.
And the ads were about sports gambling, weight-loss drugs, and AI… in that order.
We’ve covered AI. And the less said about sports gambling, the better.
So let’s stick to the weight-loss drugs today, because there’s also been quite a lot going on there.
The weight-loss drug market is dominated by two public pharma giants: Eli Lilly (LLY) and Novo Nordisk (NVO). They both sell GLP-1 medications, which are marketed and used primarily as a weight-loss treatment for obesity.
Since the first GLP-1 treatment for weight loss hit the market in June 2021 – Novo Nordisk’s Wegovy – these two major players have had very different fortunes.
Over five years, NVO’s stock price is up a mere 30% after roundtripping a rally as high as 274% that peaked in mid-2024.
LLY’s had a much more consistent run, up 404% over the same stretch of time.
And then there’s the source of this week’s drama: upstart wellness company Hims & Hers Health (HIMS).
HIMS recently pulled back its offering of a cheaper version of Novo Nordisk’s weight-loss pill after the U.S. Food and Drug Administration threatened action against it.
Then, Novo Nordisk filed a lawsuit against HIMS claiming copyright infringement. On Monday, HIMS fell as much as 26% from Friday’s close before rebounding.
Obesity drugs like these are a new frontier in medicine and have been huge drivers of revenue and attention for these big drugmakers. If the spending on ads at the Super Bowl is any indication, the trend isn’t going away anytime soon.
So let’s put the drama at the back of our minds and look at each of these stocks from a pure price action viewpoint:
While NVO and HIMS have been wrestling in the mud, their share prices have been dropping hard over the last month and year, and LLY has run away. It’s up 21% over the last year.
It’s also showing strong Short- and Long-term Health signals in the Green Zone on each. Meanwhile, HIMS has just flashed two fresh Red Zone signals on both… and while NVO’s short-term trend is strong, it’s still stuck in the Long-Term Health Red Zone.
If you want to trade the obesity drug trend, there’s almost no contest from a momentum perspective. Stick with Eli Lilly (LLY).
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily
Disclosure: Michael Salvatore holds shares of Google (GOOGL) and Meta Platforms (META) at the time of this writing.
