Alphabet Inc (GOOG)

Continues to dominate Search. Monetizing YouTube well. 30% share of digital advertising, a huge advantage. Will continue to do well.

Short runway to price target. If you get a pullback, you should buy it. Probably won't go below $100, but good if you could get it in the mid-$120-130s. Different from the other Magnificent 7, as 84-85% of revenue comes from ads. Cloud business, YouTube is doing fabulously well, Other Bets. Jumped into the lead with Bard and the large-language model, key in 2024.

Has done well, but still lots of potential. Leading player in generative AI. Leading Search engine. AI tools will make online advertising more efficient. Good, double-digit growth in online ads on YouTube. $20B in cash on balance sheet to invest in R&D. Lagged in cost reduction, but talk of refocusing to improve operating margins. No dividend.

Dominates Search, and with "pull" advertising (whereas META does "push" ads). Huge market share and growing. Now used as a verb, "to google". Some cyclicality. Taking share from traditional ads forms will continue. Cloud is growing nicely. AI will be additive, making most of its products more valuable. Billions spent on R&D "Other Bets", and at least some of these should pay off handsomely. 

It rallied 1.24% today when the market sold off. How to raise shares further? Replace ad sales staff with AI. (Are reports that the company is reorganizing its sales division.)  Cut loose or close down Waymo, their self-driving division; self-driving is not a home run.  Or spin off their cloud division; in their last report, cloud missed estimates. If their NFL coverage and YouTube views increase, then shares will jump. Break up the company into different companies could raise shares to $160.

You don't find many companies growing 20+%, with such an attractive valuation in the low 20s. Big $$ spend on R&D. AI contender. Don't listen to the day-to-day noise. Volatile sector. They own Search, so AI is both opportunity and danger, but that's what risk assets are all about.

Well run, unique capabilities. Valuation still reasonable. Headline PE around 20x, excess cash over $100M on balance sheet, no debt. Factoring out excess cash, trades around 18.5x earnings with good growth outlook. Willing to buy today.

Gen AI will continue to be a force among the Magnificent 7. Nvidia and Microsoft will remain the leaders, but the two sleepers that can outperform Apple in 2024 are Amazon and Alphabet. Apple is quality growth, which he likes, but in 2024, Apple might take a backseat to the rest of the Mag 7.

Is undeterred by last week's allegations that the company faked or exaggerated its AI demo. This remains a cheap stock at 20x forward PE. In fact, this is a growth stock.

It's a bit less than expected, so good news for everyone. As of Q3, it had around $83B in revenue, and 80% of that came from Search. So $100M here and $100M there will take care of it.

Is neither cheap nor expensive, given its amazing balance sheet and wide variety of businesses. Also, it dominates internet search. That chart since early 2022 is a big cup and a more recent small handle. If the share price breaks, it could move $45 higher.

Margins on GOOG and MSFT cloud offerings are double digit. Very profitable, generating a lot of cashflow.

Simple: they need to get their cloud platform back on track. Any growth here will push shares up. Also, would be nice if GOOG quantified their NFL advertising and how it could expand sports on YouTube.

Leader in Search and digital ads, poised to benefit from post-pandemic digital ad spending. Over 70% market share in Android smartphone market. YouTube driving volumes. Determined to be a leader in AI. Hardware sales continue to diversify revenue streams. Revenue's diversified geographically. 

Very reasonable 1.2x PEG ratio. Beat earnings and revenue. Share price is above its climbing moving averages. Forecast 18-20% earnings growth over next few years. No dividend.

We've seen these antitrust cases before. At some point, perhaps the government will be successful, but we haven't seen it yet. North of 90% of searches run through Google. Any deterioration in this would take a long time. Good for the long term. Its AI search seems to be neck and neck with the one from MSFT.