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Alphabet shares rise after Q1 revenue estimate beat — here's what two traders are watching

Trading Nation: What pros are expecting from Alphabet's quarterly earnings

All eyes are on Alphabet.

Shares of the Google parent rose more than 3% in extended trading Tuesday after the company reported its earnings results for the first quarter. Alphabet's revenue, which some were worried could weaken as companies cut ad spending on its platforms, topped analysts' expectations, while earnings missed.

It marks only the second time ever the tech company disclosed revenue figures for YouTube and Google Cloud.

"Eighty percent of revenues are still coming from advertising, and the lockdown has hurt a ton of businesses, both small businesses and large, like travel," Mark Tepper, president and CEO of Strategic Wealth Partners, said ahead of the report Tuesday on CNBC's "Trading Nation."

"The first thing that gets cut out is ad spending, so, obviously, our eyes are on that," he said.

Alphabet's overall revenue for Q1 was $41.16 billion, down from $46.08 billion in the prior quarter. The company's revenue growth rate slowed to 13% in the quarter from 17%.

While digital marketing as an industry is likely to endure through the coronavirus-driven economic slowdown, Alphabet's recovery won't be "immediate," Tepper said.

"They're going to see ad spend drop and then it's going to take a few months for this stuff to ramp up before the ad spend follows," he said of companies revisiting their marketing strategies. "So, if you can deal with some short-term pain, some short-term blemishes here, I do think this is a stock that's a great hold for the long run, but it's probably more of a second-half story."

JC O'Hara, chief market technician at MKM Partners, praised mega-cap tech stocks like Alphabet for their leadership heading into the market's February highs and out of its March lows, saying he liked the group on a long-term basis.

"However, it's the shorter-term setup that, technically, I'm a little worried about," he said in the same "Trading Nation" interview, citing Alphabet's chart.

"If you look at the chart, there is clear support at the $1,000 area," O'Hara said. "That support was tested and held numerous times over the last few years, but on the other hand, there is clear resistance at 1,300."

The $1,300 is "the exact level" where Alphabet met resistance and began to fall earlier this week, O'Hara said.

"For me, it's always difficult to buy a stock right in front of earnings while it's sitting right underneath significant resistance," he said. "So, longer term, I do like it, just short term, I'm a little bit cautious on the technical setup here."

Alphabet shares closed 3% lower at $1,232.59 on Tuesday. The stock has fallen about 8% year to date.

Disclosure: Strategic Wealth Partners owns shares of Alphabet.