Did the best business in the world just go on sale... ?
The case for NASDAQ: GOOG
For most of the past year, Alphabet did little but climb. Then June arrived and the crowd remembered how to worry.
The stock slipped from its highs, the headlines turned sour, and this week... in a twist that tells you how far it has come... it joined the Dow.
Here is what spooked people. Early in the month the company announced a very large stock sale to fund its AI buildout, which the market read as a pause on buybacks and a dose of dilution. Days later, a couple of prominent AI researchers walked out the door for rivals.
Together that fed a tidy story... Google is spending like mad and losing its best minds at the same time.
Now the other side of the story.
This is still a machine. Search, YouTube, Android, and a cloud business growing at a pace most companies can only dream of, sitting on a contracted backlog measured in the hundreds of billions.
Its AI assistant reaches hundreds of millions of people a month. The overwhelming majority of analysts still rate the shares a buy, with targets comfortably above today's quote.
My read
What rattled June was the cost of the AI race, not the health of the underlying business. The honest risk is that all that spending takes years to pay off, and the model race is genuinely competitive...
Google is not the runaway leader in every corner of AI. But when a franchise this dominant falls out of favor for reasons that are mostly about patience, that is usually when the patient get paid.
-Greg
Interested in a potential $100 trillion “AI Black Swan”? Watch this.
(sponsored) Louis Navellier: Don’t buy OR sell another AI stock…
Disclaimer:
This content is for informational and educational purposes only and does not constitute financial, investment, or trading advice. All opinions expressed are based on publicly available data believed to be reliable but are not guaranteed for accuracy or completeness. Investing and trading involve risk, including the possible loss of principal. Always perform your own due diligence and consult with a qualified financial advisor before making investment decisions. Past performance is not indicative of future results. Paid ads from 3rd parties are clearly identified. We do NOT specifically endorse these products nor are we responsible for the content of these ads. You should assume an affiliate payment will be made to us if you click a link or buy a product.