Alphabet Inc (GOOG)

Last night's results were excellent. Earnings up ~37%. Strength across the board. Share buybacks continue at a meaningful clip. Cloud business really picking up, driven by demand for generative AI.

It beat top and bottom line. Sentiment was so negative heading into the report last night, so the set-up was good. Youtube--great quarter. AI has helped GOOG. Don't count them out, their top position in internet search--we'll see. The call was also good. The stock still has legs. They didn't just clear a low bar, but they beat on every line.

They delivered a great quarter. The bar was set low. Cloud is up 35% YOY. $13 billion in capex and their AI offering is producing, despite talk of GOOG lagging the AI race. It trades at 22x PE. YouTube missed last quarter, but up this one.

Their conference call was a home run. No, internet search is not dead. Cloud is more profitable than last quarter. YouTube is actually doing 137% of Netflix in ad revenues and subscription. They have clear AI plans.

It beat top and bottom line. Sentiment was negative, so that set a low bar that they beat. You're starting to see the benefits of their AI capex with cloud revenue up 35% and the core search business is okay. Is not surprised that shares are up (over 5%) this morning without pulling back. Institutional buyers will re-enter this name.

It reports tomorrow. It's notorious for reporting at least one number that's off like revenue or cash flow. This time, management could be defensive about their AI platform. Rarely does every number go up at the same time.

It is a stock you can't argue with and has a predictable pattern long term. It goes up, then bounces around, and then breaks out again. Great long term holding.

They report today. He likes it for owning many businesses. The bad rap now is whether their monopoly on internet search should be broken up, but remember their big cloud, YouTube and ad businesses. Plus Waymo and a great balance sheet. They now pay a dividend. Don't buy into the print--could be volatile--but definitely a long-term hold.

Of next week's tech reports, he's most worried about Alphabet, a long-time holding. The stock is behaving terrible, especially compared to Meta. GOOG must convince the street that the ads on Gemini AI search will be at least profitable as internet search. Also, Perplexity is a serious competitor.

He's the most interested in this name among the megatechs. Yes, regulatory issues and fines, but the real question is whether Perplexity is eating into GOOG's search business. If no, then GOOG is very cheap.

The one with uncertainty, because of DOJ litigation as well as competition on Search (especially from the new one, Perplexity). He still really likes it though, because it has so many horses in the race.

They own 92% of online search, but they will lose some of that to AI. So, GOOG will stake out their place in AI, including search. Other initiatives: 2 billion worldwide watch YouTube and Waymo, the leading driverless car technology. They spend $33 billion a year on R&D, and they boast a good history of R&D. Shares trades cheaply, below the market PE, but grow much faster.

Inexpensive, lots of hidden value. Excess cash, lots of businesses. Cloud services is not yet profitable. Getting value for your money. Number of outcomes possible from anti-trust. If forced to be broken up, you'll win. If forced to provide Search for free, you'll also win. Yield is 0.4%.

DOJ is looking at possibly of breaking it up, but it was just a passing comment as a potential remedy. It would be years away, with legal appeals along the way. Looking back to 1980 when a monopoly company (AT&T) was broken up, it benefited shareholders. Most research shows that people will still prefer the Google search engine. Stock's back up today. 

Down 16% from recent highs. 1.4x PEG ratio, pretty cheap. Search has 90% market share right now. YouTube and Google Cloud continue to grow quickly. Yield is 0.49%.

His largest holding. It will take years before anything comes out of this anti-trust suit, so he's not worried. The feds won't force the company to break up. He's comfortable holding it. They own internet search and have a solid balance sheet. A great performer over time with predictable earnings growth. There are high barriers to compete in search. He's used Perplexity and finds it okay, but their market share in search is small.