Alphabet Inc (GOOG)

It reports Thursday. Trades at 22x PE. He's been taking off shares because it performs so badly when it typically reports.

Broad market driver now is AI. To benefit from, and optimize, AI, you need data. Only the Mag 7 have massive data. Play on digital advertising. A bit more essential than META. Both have a fairly reasonable valuation, though META is a bit more of a value play right now. Above his buy price right now, wait for pullback.

Lots of noise in the last year. Remember, pre-eminent Search tool in the world, a franchise it wants to protect. Working hard to use AI to maintain that leadership. Low 20s multiple, growing in high teens to 20%. Buyable well into the future. Exciting prospects. Very strong GARP. Risk: 90% market share possibly in jeopardy due to new technology.

Build it into your portfolio, but don't get carried away.

He's change his tune on this, based on today's analyst notes. It's lost no market share in internet search and ad revenues remain robust. YouTube continues to explode, worth a third of Alphabet; 71% of teens use it everyday. Also, their new live NFL streaming will generate an attractive return through ads. Google Cloud will grow even more. Google continues to research areas we don't hear of, such as mapping proteins. Trades at a cheap 16x 2024 PE.

Keeps providing value to investors. Just off all-time highs right now, but it's not expensive. Years ago, it was far and away the AI leader. But then MSFT acquired OpenAI. Generative AI is probably leaning toward OpenAI. This is a problem, needs to be addressed. 

All pieces are there for them to win the AI arms race: best access to resources like research and hardware, some of the best internet infrastructure in the world, amazing consumer data. He wants them to focus on AI. They just need to do it. Tremendous value here. No dividend.

Like much of the market, it's overbought. Better to buy it at $143, its 50-day moving average. He just trimmed this yesterday. Growth rate is great at 12-15% and 20x PE. Obviously, are the search engine king and YouTube is doing well. AI is burgeoning. Likes it.

Core tech holding. Lagged Mag 7 a bit. Advertising business continues to grow, as does cloud. Generative AI Gemini is being applied to various tools. Generative AI is still in early days, has financial capacity to develop it. No dividend.

They haven't cut costs in the self-driving cars and other research projects, but at 22x forward PE. Apple wants their AI. They hold a rich database of consumer data. They will be a major player in AI, like helping you to plan a trip or find a restaurant. Digital ads cane still come back from the pandemic. This is a long-term hold.

Reports today of it in talks with Apple to license its Gemini AI for Apple's iPhones. That's positive. GOOG is a kind of dysfunctional stock. Own, don't trade Apple, but he can't say the same about Alphabet.

Fantastic value. Trading above market multiple, yet growth is 4-5x GDP and 2-3x that of the average stock. Missteps every once in a while. Don't be too critical, they will work out. Extremely well positioned. In everybody's ecosystem. Likes it very much.

He added shares, because this is facing maximum negativity, but ad revenues will pick up because it's an election year. They're one of the two winners in AI now (as well as MSFT) and selling a a discount to the market.

Is rebounding today as most tech stocks sink. Is it short covering or rotation out of semis? (Today is clear referendum on Tesla, which is down.)

Antitrust concerns. Underperformed compared to some peers. Well managed, diverse revenue streams. Will have to reinvent Gemini, a catalyst for the next 6-12 months. Good entry point now. Buy low, hopefully sell high later on. No dividend.

Still likes the story. Leader in Search, good growth in YouTube. Largest player in advertising. AI hiccups will get solved. Key player in AI and advertising.

There are always risks, but we still consider GOOG quite attractive. When it first came out with its AI solution last year it dropped sharply. But it spends a massive amount on research and we are fairly confident it will be able to protect its market share. 
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