Alphabet Inc (GOOG)

Shares dropped 7.29% on reporting. It got punished for announcing spending of $75 billion in capex this year--punished for investing heavily in growth, which is a big change from last year. It ran up 25% since last September till the report, making it the third-best performer in the Mag 7. The quarter was mixed: slightly weaker revenue and surprisingly  weaker Cloud revenue, but EPS and YouTube revenue beat. Growth slowed, but core advertising is still doing great. And yet Microsoft is spending $80 billion in capex, and Meta $65 billion. What has changed is the arrival of DeepSeek, which has changed the narrative around AI spending: Do megatech companies still need to spend a lot on AI infrastructure? Is the reaction to GOOG an exception or the new norm?

Likes it very much. Very reasonable multiple, surprisingly low in the face of 18-22% annual growth. Market's somewhat skittish about its losing dominance in Search due to AI. It has 93-94% market share in that one area, and undoubtedly will lose some of that. Flipside is that the whole pie is going to get bigger. 

It reports Tuesday. Is their search business cannabilized by Gemini AI? YouTube is on fire and covers up weakness. Listen for any growth in their infrastructure business--if strong, shares will fly.

Both are in his top 5 holdings, so he'd pick both. If he had to choose one, he'd pick GOOG, mainly because it's cheaper. Silicon Valley's known about DeepSeek for a while, and BABA has an even better widget. You're going to see more innovation, especially on the software side.

Anti-trust crackdown a risk, but overall an excellent company. Lowed valuation within Mag 7 cohort. Would recommend buying and holding. 

With Trump, there's a little less concern of threats of breaking up the company. GOOG is doing well in cloud, and Europe won't be as hard on them as before. GOOG is one of the cheaper Mag 7 stocks, but still vulnerable to market risks. Prefers it at $150 than $200, though.

On average, they have cash, massive cash flow and good growth. On advantage the Mag 7 has is that they have the capacity to spend billions on R&D. GOOG, for example, spends $40B annually. Smaller companies just do not have this advantage. The group would likely grow faster if they were allowed to do acquisitions. They will be continue to be closely tied to the overall economy, and are not immune to declines (i.e 2022). But we think they have several years of growth, if not more, ahead of them. 
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When a new client comes in, he buys a bit. When it gets ahead of itself, he sells a bit. A core holding. Not that expensive at 21-22x. Pressure now, as Europeans are looking at its market share. Waymo starting to get traction. Great outlook. Leg in for a great long-term play of 5 years or more.

Trading at a market multiple, but growing faster than the market. After AI concerns. GOOG got its act together and are now ahead in AI. Hugely profitable and innovative. Are building recurring revenues. He loves using their Gemini AI. It will come down to consumer applications.

Still positive. Trades around the market multiple, yet growing 3-4x the economy. Lots of different opportunities to do well. Main source of income is Search, but YouTube and Waymo monetization opportunities are immense. Plus there's AI.

New highs recently. 200-day MA is moving higher, so is the 200-week. Clear trend of higher highs and higher lows. Still not expensive. Clear leader in Search, and other areas of its ecosystem make it a powerful company. 17% EPS growth at only 22-23x PE, so PEG ratio fairly attractive. 

Good name to continue to own in the mega-cap tech space, as it's a space you have to be careful in.

Has done very well, but still has some runway left. He targets $215. GOOG poised to take the lead from Open AI and Microsoft, mainly due to the launch of Gemini 2.0, which solidifies their leadership in search and AI. They won't lose much market share in search now with Gemini 2.0. It remains undervalued compared to peers.

If its quantum computing chip ever comes to fruition in the next 5-10 years, then this is a stock you want to own. He owns MSFT, and it's also involved in quantum computing. Other names to think about are AMZN, IBM, Atos out of Europe, and Toshiba from Japan.

If you double your money, do the smart thing and sell half. These tech stocks are 3x riskier than the market if interest rates go up. It's about managing risk in your portfolio. 

We remain highly confident in GOOG's outlook. 
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Likes it. Just broken out past old high, positive. Likes stocks that consolidate, go up, and repeat. That's the pattern for this one. Fundamental analysis from his team gives lots of reasons it'll be a leader of the pack.