Alphabet Inc (GOOG-Q)

It's about digital ad sales coming back and Google cloud being strong. He expects a really good quarter today.

The street expects 11% and 16% revenue and earnings growth. Long-term, GOOG is the most vertically integrated to win. Think of Gmail, Google calendar, YouTube and Google search. Google has all our data and can make a powerful AI assistant. The key thing is how GOOG will monetize their AI (whereas Meta has made that clear).

The only thing to be a bit aware of is that the chart might be making a head-and-shoulders formation, which can be bad (though he's not saying it is). Does appear to have broken a point of resistance. At this point, it's at least a hold; not sure he'd be piling more in. Chart's a 7/10.

Is trading at a valuation discount to peers, because we all know they will lose their monopoly in internet search. But people are staying in the Google ecosystem to use their free AI. Also driving them are YouTube and Waymo. He expects their next earnings to impress.

The fear about them was that AI will eat into GOOG's search market share. Yes, AI will, but the overall search market will likely grow. So, GOOG's market share could shrink, but it's search business could still grow. He's bullish. Also, GOOG has a partnership with Uber in self-driving cars, an exciting, growing business. Third, GOOG owns YouTube which dominates the streaming market by far, bigger than Netflix.

When you buy GOOG, you get Waymo for free. Waymo is actually ahead of where TSLA is on robotaxis. 17-18x forward PE. The only Mag 7 he owns. By far the cheapest. Concerns about AI engines taking away its core Search business, but no evidence of that yet. Investing heavily in R&D to protect its assets. One of the world's great business models.

He sold it and that was a big mistake. Sold because the Justice Department deemed GOOG a monopolist, which would lead to a break up of the company. But if you believe that the parts hold value, then it's fine. He has seller's remorse. Waymo is way ahead of Tesla in self-driving cars, and Waymo could have a huge impact on GOOG. He wants to re-buy GOOG. 

Holds the best value among the Mag 7, in terms of forward PE around 18.5x. He liked this at $140-150, less so now.

In his firm's momentum portfolio. Dominant in Search and leader in digital ads, which are tremendously cash-generative. YouTube is an increasingly valuable ad property. Cloud services growing rapidly, one of top 3 players. Innovative AI investments should pay off nicely. Waymo is interesting for its cash-generating potential.

Lots of hidden value. Negativity on the anti-trust case and impact of AI on Search. Such a premier destination for online advertising. Business fundamentals still very strong. Generates a ton of cash. No loss of Search market share. Unique AI capabilities. Trades at 20x PE, which doesn't include the extra cash on its balance sheet, cloud services, or other subsidiaries. Strong buy today. Yield is 0.48%.

The threat could be that a competitor will eat their lunch in internet search, but on the positive side is that they could lose some share in search, but GOOG also has an AI presence and the search pie could get bigger. Also, YouTube is the largest streamer in the world with over 2 billion active monthly users, and Waymo which is promising.

It remains in the Mag 7 the best performer in the past month and the cheapest as well. They are quieting the bear case in terms of search disruption.