Alphabet Inc (GOOG)

Trading at a discount to the S&P average multiple, even after this wonderful run. That's on the back of increased earnings. When earnings increase rapidly but the price does too, the valuation doesn't change, and a company can still remain a very good buy.

Depending on the day, commentary is that it's either winning or losing the AI race. It's all just noise. What matters is that they're in the AI race. YouTube, Waymo, and other initiatives are all irons in the fire.

Core holding for a very long time. Printing press for money. Debt-free balance sheet. Well positioned for the future. Recent catalyst has been that anti-trust penalties less severe than feared. Holding, as it's now above his buy price.

The question was on his opinion of these two companies. They're different sizes and in different spaces. What will the business models look like. Both should continue to do well. He owns Amazon which is among the AI leaders. Interest rates will continue to drive the markets.

Things change quickly in the space. Was viewed as AI runner-up, and now seen as a leader. Search was seen to be in jeopardy, but now that view has changed as well. He looks at valuation and steepness of revisions on earnings estimates. He's buying for new clients.

Is up 33% this year, 4.49% today alone. He made the mistake of selling it, because he feared the government would come down on them for anti-trust. Didn't happen. This and the Mag 7 have much more room to run. 

A 2 to 3 year timeline is the sweet spot for a long term investor. It is generally easier to form a thesis over three years. Acceleration is remarkable and no case has been made for a monopoly. Google can compete on the AI front and there is not as much focus on the search component. The value of the sum of its parts is greater than people realize.

It has been allowed to keep Chrome so that decision is good for the company. The legal system in the U.S. can't keep up with the fast pace in the market place, especially tech. The anti-trust laws were created over 100 years ago. Google hasn't raised or lowered prices and lots of it is free.

Great week, partially because US government announced no breakup. Cheapest of the Mag 7 at 22x PE, growing 20% a year. Negative is that ChatGPT will encroach on Search. Waymo is, by far, the leader in self-driving. Great business.

How will AI impact their search engine? So far, so good, though. Will be fine.

Some regulatory risks have now lifted. Still a decent valuation of 23x forward PE, discount to mega-cap peers. Continues to dominate digital ad space. Applying generative AI across the board. Cloud's a bit behind MSFT and AWS, but the entire space is growing so revenues are too. $100B in cash reserves gives lots of options.

Shares jumped over 8% today on a court ruling; GOOG skirts an anti-trust, anti-monopolistic ruling involving Apple. He regrets selling it before after a huge gain. 

Thinks it's going higher, but perhaps don't buy now. Wait for pullback. There's always a reason for a stock to pull back at some point, but he can't predict the magnitude.

At this level, risk/reward is not as good as entering at a lower price. Trades ~20-21x forward PE, whereas NVDA is trading at 40x forward PE or more. Lots of upside potential in things we're not even talking about yet, such as quantum computing -- freebies that may not be baked into the valuation today.

Dumping a high-growth tech stock then planning to buy back at a lower price is a lot harder than you think. He sold GOOG after the Justice Dept. called GOOG a monopolist. Then, GOOG went up and the Justice Dept. did not break up GOOG. He didn't get back into the stock. In fact, GOOG is worth more if it is broken up into separate companies. He has tremendous remorse over selling it. Lesson: trading is the enemy of many investors.

Waymo's self-driving is here and will see hockey stick-shaped growth.