So $GOOGL (Alphabet Inc Class A) has not had a great year when it comes to price action, but that's great for us. The stock started the year at ~ $190 and saw lows of about $140, this helped us secure a big position at an average of around $160, and with the stock now trading at $178 it has become our largest holding.
The price drop was, and still is based of fears that LLM's such as ChatGPT will kill the search business, but I think they are overblown. While it's true that some people are using LLM's more and googling less the number don't show any damage to the search business yet, last quarter we saw a growth of ~8% YoY.
Additionally one has to remember that $GOOGL is also in the AI game with gemini, which I think is currently the best model and has a good chance of coming on top, so even if LLM's eventually do kill search eventually I think it's highly likely that $GOOGL will retain a good share of the market. And overall I think AI will be accretive for the company given all the initiatives they are working on.
We also must remember that while search represents about half of the revenue there are other segments that are growing fast. The cloud grew ~28% YoY, subscriptions grew ~18% and youtube grew ~12%. And there are some other business segments that still don't show in the financial but might have a big impact in the future, such as Waymo.
So even after the recent recovery I think $GOOGL has a good risk/return profile, trading at a P/E of close to 20 and with expected earnings to grow in the range of 10% to 15% yearly, while the overall market trades at a P/E of 25 and has an expected earnings growth around 7%.... Show More
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Sat Nov 08 2025 09:09:35 GMT+0000 (Coordinated Universal Time)
