Alphabet Inc (GOOG)

A year ago was trading at 16x PE, by far the cheapest in the Mag 7. Last year's selling was overdone and still likes it after this rally.

Along with AMZN, looks pretty compelling here.

From a technical perspective, the MAGS ETF is trading below the 200-day MA, with relative RSI weakening. This group is less attractive, and still over-owned.

He's still holding this name, as it's one of the strongest of large-cap tech. Across the firm, they have a 7% technology weight. That's extremely underweight.

He has owned since 2015. Google is emerging as an AI juggernaut and in fact AI was built on their transformer architecture. It is building its own chips with its tensor processing unit to do what they want them to do. Gemini has 750 monthly users and is integrating with other divisions.. Some think it will become the most valuable company in the world.

Behemoth of the internet. Gemini keeps leapfrogging with ChatGPT. It has the $$ to spend, whereas ChatGPT has to keep raising money. Low 20s PE, revenue will grow high mid-teens. A key part to the AI race is that its database is huge. Yield is 0.27%.

Hasn't trimmed. Search did not go away because of ChatGPT. Nor is it way behind in AI. Cloud business continues to grow, still third-largest player. Waymo is everywhere, an undervalued asset. Ads still doing well.

A year ago, lawsuits and AI worries. Look where it is today. Now people are worried about MSFT and META. In a great position. These are the most adaptive, well-managed businesses ever. GOOG a bit pricey right now, but in a really good place.

The metric he watches on all the hyperscalers is the margin they earn on their AI spend. Margins are in fact stable for GOOG (and MSFT) despite all this AI spending; they're making money on AI and saving costs. He owns all the hyperscalers who will benefit from all this AI spending.

One of her highest-conviction tech positions. Massive run. She sees concerns about spending as an opportunity. Trades ~22-23x forward PE and lots of cashflow, still reasonably priced for what you get. She's not trimming. Upside of 15-20% would not be a surprise.

2025 proved that its various businesses are accelerating together, not trading off against each other. Spending ramp up is big, but so is the opportunity. Any weakness is a reason to add.

Owns GOOG and AMZN, but not MSFT. All are spending at least $100B this year. It's going to be a show-me story. Investors really want to see if spending will result in future earnings. He thinks it will, but there's a bit of fogginess around that. 

Plus, markets are shifting away from mega-cap tech, putting pressure on some of these names. If your time horizon is 5 years, not 1, you should do well with most of these hyperscaler names.

Primary reason for stock taking a hit would be valuation. Loves this company, but the multiple re-rated higher once market realized it actually wasn't behind on AI. Phenomenal, long-term compounder. Valuation's a bit rich right now.

It reported this week. Will spend much more on AI than the street expected. They could get away with this because they reported excellent numbers and are winning the AI race, but is down 3% the past day or so. Shares need to take a break anyway, up 70.5% since the start of 2025. It holds great businesses: Google, Gemini, cloud, Waymo, YouTube.

Yes, capex is on everyone's mind. GOOG's taken a beating, but it's still in a range. Broke the lower part of the range this morning -- just under the support level, but it's sort of coming back. He's not that surprised, as it's a year of transition.

They reported stunning quarter today with their Gemini racking up already 75 million monthly users, but are spending $175-185 nillion in capex, above the street's expected $115 billion. Gemini is winning the AI race so that spend is worth it and will beat its peers.