Alphabet Inc (GOOG)

If shares weren't so inanely cheap, he would have given up on this. His enthusiasm for it has certainly cooled.

All of tech has been trashed. Higher valuation multiples came down. Biggest area of growth has become online advertising, and this has become a lot more cyclical since it's a bigger part of the economy. This may be a risk in an economic downturn. Bigger issue is the whole move to AI. GOOG makes money on the clicks, so AI may make GOOG somewhat irrelevant. A new risk to be aware of. He's not going all-in on it anymore, because a couple of its businesses are facing some shorter-term risks.

His largest holding now. He can hold onto a losing stock because he makes it up with his hedges. He understands its intrinsic value. Price target of $121, very decent 20-25% runway ahead. So many horses in the race. Bard is strategic, last week's stumble was not much of a mistake.

If the stock market is like a horse race, this is one stable with a dozen very competitive horses in the race. Biggest digital advertiser in the world, by a long shot. YouTube, which has yet to be monetized. Waymo is the leader in autonomous driving. No dividend.

Company hit very hard by correction in tech sector.
Will continue to hold shares. Core tech holding.
Digital advertising very strong.
A.I. product test didn't go as well as hoped.
Very profitable company regardless.
Good long term hold.

Wait, if you already hold and hold for the short-term. Growth is oscillating away and the Fed could be hiking rates. But long-term, you can buy here expecting growth in 2024.

Just unfortunate timing. An enduring business. Big fan. Regulatory overhang for years, but no matter how this plays out, value will be unlocked over time. Digital advertising will improve as the economy does. Debt free, tons of excess cash, trades at 16-17x earnings. Incubating investments. Sentiment will change, the multiple will expand, earnings will move higher. Consider adding while down, but definitely sit tight.

It trades at support at 14x, and it will maintain its dominance in online search.

This sell-off is overdone now. Search is Google's war chest, so Google will figure this out, meaning the AI demonstration snafu earlier this week. Gogole is doing cost efficiencies and remain an innovative company. Microsoft won the first round this week.

It was a recent trade, and he just sold it, because this week's Microsoft Bing AI announcement was a game-changer. Because Google owns 97% of internet search and online ads, you don't need to move the needle much on Microsoft to make it a more competitive pricing environment. He was never a big fan of Google anyway and he got it luckily before it hit bottom

GOOG had an AI presentation and its BARD program came up with the wrong answers. 
This sent investors into a tizzy but the market reaction looks far overdone to us. 
GOOG was worried about 'reputational risk' in launching a product too early, and now its fears have been realized. 
It is today's news story but won't be tomorrow's.  
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It is very very big and therefore hard to move the needle, but there are a lot of initiatives the company can do such as pricing, launching new services and getting into AI. The advertising component is cyclical and is the easiest place for companies to cut spending. There are one billion searches a day on Google and its YouTube is the most dominant platform around. It is trading at a decent valuation of 20X earnings, has an excellent balance sheet, and is buying back $60 billion worth of stock this year. Now focusing on cost cutting so be patient.
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Another black box, lacking transparency in its many operations. Has a huge cash position and trades at 19x. Though he owns it, he isn't thrilled with it, because it lacks transparency. It's an ad-based business, an advertising now is awful.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Spends about $37B a year on research. ChatGPT is probably its best shot at making Bing anything more than a joke. We do not think GOOG needs to be sold. It is too cheap, and a return to advertising spending will still be very positive for earnings. Would recommend buying. Unlock Premium - Try 5i Free