Alphabet Inc (GOOG)

He shares the market's concerns on valuation and the AI buildout. There's this massive outlay of money by companies, but no one knows what the returns will be. He suspects returns will be infrastructure-like. But he always believes that if you buy right, the upside will take care of itself.

Absolutely loves this name, he's been invested for many years. To his mind, has the best platform, data, massive profitability, very attractive balance sheet, and AI capabilities. Lots of hidden value in non-core assets, which is starting to be realized. Valuation is more fair today, right round 28x adjusted earnings -- not massively expensive, but still rich. If you own it hold on, but it's not a buy today. Be patient, don't chase. Look for more of a pullback, and he thinks you'll get it.

It was out of favour a year ago because of concern over it being broken up. It could become the most valuable company in the world. It is a vertically integrated AI machine and has the chip design capabilities of Nvidia. Google's provision of AI technology will continue to be in demand even after the bulid-out of data centres lessens.

Really excelled. They control the "pipes", and now the chips (via Tensor, though it's more for software than hardware), and the eyeballs on screens. They have it all. He's trimmed only because his firm never puts more than 10% in any one stock.

Sergey Brin returning has been a game-changer; he's taken out the bureaucracy and slowness--Google had not executed in recent years. We see his presence in the share price now.

Prefers Alphabet to Nvidia and is a bigger holding for him. Eventually, there will be competition for Nvidia, whose margins are much too big.

Up 70% this year. So well integrated vertically--YouTube, internet search and ads.

It went from AI loser to AI winner over the past year, yet still trading at a low PE. They posted great numbers. People are positive over Gemini 3. ChatGPT did not take over search from Google. Also, YouTube continues to do well. People don't give enough credit to Waymo's driverless cars. GOOG will continue to do well. They have a great cloud business, too.

Is a winner as rotation in leadership happens out of Nvidia and into this name. Could be further upside here. A year ago, people hated Google.

Like many, ChatGPT blew him away three years ago, but now he's migrating to Gemini, which has unbelievably dethroned ChatGPT. GOOG shares have rocked 68% this year as many realize that GOOG was undervalued vs. the rest of the Mag 7. Then, GOOG went into overdrive as people saw Gemini 3 and were blown away. GOOG already had an advantage, because GOOG knew how to link their search engine to Gemini seamlessly. Genius.

At the very top of the trend you have AI and the hyperscalers such as GOOG, AMZN, and MSFT. They're putting the boots to software companies. GOOG has produced a quantum computing chip, which calculates millions of times faster than AI chips.

You want to have at least one of these hyperscalers in your portfolio. If quantum computing becomes reality in the next 5-10 years, those are the names that will dominate the space.

If you're worried about the bubble bursting, then it's important to be disciplined. Buy it, and if it doubles in price you take half off the table. That protects your downside over time.

Not extremely priced, but reasonably priced. Between 20-25x PE going forward. Lots of great underlying growth. Gushing cash, and sees that ramping up. Spending a lot on AI. Whether AI works or not, still going to be gushing cash from its other businesses. GOOG has taken off, while META has actually dropped quite a bit. 

Has risen from above-average in his relative strength ranking to this top 10, the best among the Mag 7. Is less volatile than its peers than Nvidia or Amazon, for instance. Is more steady Eddy at a time when investors want stability.

Trimmed, as the position hit his team's maximum weighting. Giant in the search engine space. AI is picking up. Paying 26x PE for 16% growth, a very fair PEG ratio. YouTube performing extremely well, as are hardware products/services. Additional services keep consumers looped in. Long term, should continue to perform very well.

They were lagging in AI, then put out a new AI product and shares soared. Google has its own data centres, whereas openAI must find data centres. So, Alphabet is well-positioned. And Google search is not dead.

The question was on adding to these companies. He likes them both. Amazon is a hybrid with its e-commerce side and web services. AWS controls about 30% of the world cloud services. Its valuation is reasonable with a low 30's P/E. Google has about 10% of the world cloud services and is trading at a mid 20's multiple. Had a good earnings report. There is lots of upside in both.