Alphabet Inc (GOOG-Q)

Sometimes ensnared in unfavourable headlines. Will probably prevail in US court cases. In his momentum mandate, continues to like and buy. Dominant player in digital advertising through Search, which makes up 70-75% of revenues. Really likes the cloud business (we may be in middle innings of cloud hosting). Lots of "other bets" that could pay off spectacularly. 

Fears that ChatGPT and Perplexity could dislocate them in Search, but Gemini is being wired into the Search functionality and adding value to Search. Behaviour entrenchment in Search will be hard to dislocate. Remember that we use the word "google" as a verb now, which speaks to 25 years of habit-forming consumer behaviour. Will maintain its dominant position as long as it keeps investing in R&D and upping its game.

12-month price target of $203. Viewers should check out Gemini; it's really a leader, and that's because of Google Search. Concerns that competitors will eat GOOG's lunch on this, but if you try it out you'll see that Gemini sets the bar quite high. 

Lots of litigation out there, but this name (and other favourites) have so many horses in the race like hidden gems that will come to fruition. And you're getting Waymo for free.

They are the leader in search and the criticism is that they will lose market share. So sell Google? He argues that Alphabet will recapture that share, because GOOG is a leader in AI as well. Yes, GOOG will lose some of their current 92% share in search, but maybe the overall pie grows bigger, so GOOG revenues will still expand. Also, GOOG has a lot else going on--YouTube is massive with 1 in 3 humans using it, Waymo. Shares have sold off so much that the PE is below the market average now.

He considers it a value stock with concerns about anti-trust laws and also about AI Chatbot etc. taking away from their search business. It shows 14% revenue growth but the question is the weighting in your portfolio. Growth could slow down.

Very positive outlook, based on generative AI trend. The most controversial of the Mag 7, as AAPL reported yesterday that search queries are down for the first time ever. That struck a negative tone on GOOG. Over time there may be more competitors, and pricing may have to come down. Trades at only 15x earnings, good value here at $150-155.

They won't sit still (and could buy a competitor), and Gemini is highly respected, but the company hasn't promoted it well. There is opportunity, but most of their revenue is coming from traditional advertising on Google search--that's a problem. YouTube is fantastic generating lots of ad revenue. Also, how do you make money off chatGPT? Maybe this problem is already priced into GOOGL, since its PE has come down.

He just trimmed. How often are you using Google search vs. chatGPT (85/15 for him). Ad dollars will decline within Google. He wanted to reduce his overweight in GOOGL and hang onto a little. Are lots of reasons to like GOOGL, still because of lots of other businesses, but search is their golden egg.

Might be affected on today's news that AAPL will be adding some AI-search capabilities to its browsers. Still likes it. Down 27% from highs earlier this year. Still above 200-week MA, which is moving higher. Winner long term. Trades at 18x forward PE for 13-14% EPS growth. Embedding AI solutions across its ecosystem. Still the leader in digital advertising, cloud continues to grow. There will be choppiness against expectations.

While there will be continued competition in AI, this name has so many engines for growth. Not going anywhere.

He just heard the news, so he is avoiding a knee-jerk reaction either way. He is holding on for now. His position is not set in stone. This isn't the first threat to Google.

This is huge news. Search is their cash cow, their primary business. The concern over recent years is that Google is not moving fast enough to fend off competition. Maybe the best outcome is that Alphabet split into businesses. They will have to innovate and evolve to replace that search cash cow, and he thinks they can do it.

He sold it recently. This news is very significant. Google won't disappear--they have a steady business--but the duopoly Google shares with Meta in internet ads is in question. This is a watershed moment. For the first time, Google is competing in core search, particular AI which are growing better and complex, yet easier to use and attracting a younger user. Also, Google faces a problem in travel search declining from less traveling and tariffs. It's been said that travel search accounts for 13% of Google searches.

Search is 57% of their revenue. If such revenues decline, Google won't be able to invest in anything else but search.

Pretty well a value stock. You can go ahead and buy this one.

The Mag 7 name he likes going into the second half of the year. Search is still extremely popular even though everyone was worried about AI. At the front of the line when it come to innovation in AI. So many other horses in the race. 75-80% of revenues come from ads; so a recession would definitely hurt, but that seems to be off the table for now as the S&P 500 "death cross" has recovered for now.

One of the cheapest tech companies around, trading well below market multiple. Search, YouTube, and cloud all grew last quarter. Next quarter will be telling as to where capex will be focused -- continue on AI or not? FTC lawsuit is an issue.