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Never any single stock of $GOOG for the past 4 years.. I should've added more.

Google Has Been an AI Winner. What to Do With Alphabet Stock Now

Stop searching for Big Tech's best artificial-intelligence stock. Alphabet has been the clear winner, and the gains could keep coming.A year ago, the future looked bleak for the company. In August 2024, U.S. District Judge Amit Mehta had declared Google a " monopolist," leaving investors to wonder if the internet search pioneer would be broken up. As that legal drama unfolded, OpenAI's ChatGPT went from one million users, days after its November 2022 launch, to 300 million weekly active users in December 2024, raising the question of whether Google's search business would be destroyed by AI. The fears left Alphabet stock trading for about 20 times estimated earnings for the next 12 months, the lowest price/earnings ratio for a Magnificent Seven stock, and below the S&P 500's 22 times multiple.

Google Has Been an AI Winner. What to Do With Alphabet Stock Now

# Alphabet and Apple Emerge as Strongest Survivors Among 'Magnificent Seven' Amid AI Market Volatility

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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{"i18n":{"language":"en_US"},"data":{"magic":2,"id":503614640137184,"tweetId":"503614640137184","gmtCreate":1763975998914,"gmtModify":1763976003525,"author":{"id":4117957040918852,"idStr":"4117957040918852","authorId":4117957040918852,"authorIdStr":"4117957040918852","name":"Nana30","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":13,"crmLevelSwitch":1,"currentWearingBadge":{"badgeId":"1026c425416b44e0aac28c11a0848493-2","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Senior Tiger","description":"Join the tiger community for 1000 days","bigImgUrl":"https://static.tigerbbs.com/0063fb68ea29c9ae6858c58630e182d5","smallImgUrl":"https://static.tigerbbs.com/96c699a93be4214d4b49aea6a5a5d1a4","grayImgUrl":"https://static.tigerbbs.com/35b0e542a9ff77046ed69ef602bc105d","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2025.03.07","individualDisplayEnabled":0},"individualDisplayBadges":[],"fanSize":5,"starInvestorFlag":false},"themes":[{"themeId":"6935b14d0b4b3a7033ce1136723df16c","categoryId":"2929bb7468f5415f853fd96fb35d7c3b","name":"Alphabet and Apple Emerge as Strongest Survivors Among 'Magnificent Seven' Amid AI Market Volatility","type":2,"rnLink":"https://laohu8.com/RN?name=RNTheme&page=/theme/special/finance&rndata={\"themeId\":6935b14d0b4b3a7033ce1136723df16c}&rnconfig={\"headerBarHidden\": true}","description":"Amid recent tech sector volatility and concerns about an AI bubble, Alphabet and Apple have outperformed other major tech companies in the 'Magnificent Seven' group. Over the past three weeks, Alphabet's stock rose by 6.6% and Apple's by 0.4%, highlighting their resilience and potential to thrive despite market corrections. Alphabet notably increased its 2025 AI spending estimate to $91-$93 billion, signaling strong commitment to AI investments.","image":"https://static.tigerbbs.com/8e4e83df7de163aaf4bf9aff291233b3"}],"images":[],"coverImages":[],"title":"","html":"<html><head></head><body><p>Never any single stock of $GOOG for the past 4 years.. I should've added more.&nbsp;</p></body></html>","htmlText":"<html><head></head><body><p>Never any single stock of $GOOG for the past 4 years.. I should've added more.&nbsp;</p></body></html>","text":"Never any single stock of $GOOG for the past 4 years.. I should've added more.","highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/503614640137184","repostId":2585453425,"repostType":2,"repost":{"id":"2585453425","kind":"highlight","weMediaInfo":{"introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"media_name":"Dow Jones","id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1763969576,"share":"https://ttm.financial/m/news/2585453425?lang=en_US&edition=fundamental","pubTime":"2025-11-24 15:32","market":"hk","language":"en","title":"Google Has Been an AI Winner. What to Do With Alphabet Stock Now","url":"https://stock-news.laohu8.com/highlight/detail?id=2585453425","media":"Dow Jones","summary":"Stop searching for Big Tech's best artificial-intelligence stock. Alphabet has been the clear winner, and the gains could keep coming.A year ago, the future looked bleak for the company. In August 2024, U.S. District Judge Amit Mehta had declared Google a \" monopolist,\" leaving investors to wonder if the internet search pioneer would be broken up. As that legal drama unfolded, OpenAI's ChatGPT went from one million users, days after its November 2022 launch, to 300 million weekly active users in December 2024, raising the question of whether Google's search business would be destroyed by AI. The fears left Alphabet stock trading for about 20 times estimated earnings for the next 12 months, the lowest price/earnings ratio for a Magnificent Seven stock, and below the S&P 500's 22 times multiple.","content":"<html><head></head><body><p>Stop searching for Big Tech&#39;s best artificial-intelligence stock. Alphabet has been the clear winner, and the gains could keep coming.</p><p>A year ago, the future looked bleak for the company. In August 2024, U.S. District Judge Amit Mehta had declared Google a &#34; monopolist,&#34; leaving investors to wonder if the internet search pioneer would be broken up. As that legal drama unfolded, OpenAI&#39;s ChatGPT went from one million users, days after its November 2022 launch, to 300 million weekly active users in December 2024, raising the question of whether Google&#39;s search business would be destroyed by AI. The fears left Alphabet stock trading for about 20 times estimated earnings for the next 12 months, the lowest price/earnings ratio for a Magnificent Seven stock, and below the S&amp;P 500&#39;s 22 times multiple.</p><p>What a difference a year makes. A breakup probably would have been nothing to fear, given that Alphabet has YouTube, self-driving ride-hailing company Waymo, the Android operating system, a cloud business, and foundational AI and AI-chip technologies -- parts that might have been worth more than the whole.</p><p>But it never came to that. In September, a judge came back with relatively mild penalties proposed on the antitrust front. And, despite worries that AI would disrupt Google, the company has shown a remarkable ability to adapt and grow, with four consecutive earnings beats under its belt and the recent launch of Gemini 3. The stock has gained almost 70% over the past 12 months and traded at a record high this week. Berkshire Hathaway even bought the stock.</p><p>The question now: What should investors do with the stock? Barron&#39;s recommended it 12 months ago, when we said it was undervalued by 50%. It did better than that. Shares now trade at 26 times earnings. About half of the gain came from a P/E multiple expansion, while the other half came from earnings growth.</p><p>While rapid gains often leave investors nervous, and itching to dump their biggest winners, investors should stay the course. Don&#39;t expect a repeat of the past 12 months, but good old business execution should help push shares higher.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/1cac44cae19860e4e7bd36ef8b6a6eb8\" tg-width=\"732\" tg-height=\"633\"/></p><p>&#34;The stock going from $160 to over $300 today has made it look less attractive,&#34; says Oakmark Funds portfolio manager Bill Nygren. &#34;[But Alphabet is] still not selling for more than we think it&#39;s worth.&#34;</p><p>For starters, Alphabet still isn&#39;t all that expensive. Even at 26 times earnings, it&#39;s the second-cheapest of the Magnificent Seven, with only <a href=\"https://laohu8.com/S/META\">Meta Platforms</a>, at 20 times, trading at a lower P/E multiple. The comparison between the two is telling. Both are making gobs of money, and both are spending lavishly on their AI capabilities. But whereas Meta isn&#39;t seeing much of a return just yet -- its pretax profit margins fell two percentage points year over year, while capital spending more than doubled to almost $19 billion from around $8 billion -- Alphabet has been getting more profitable. It grew third-quarter pretax profit by 39% and expanded pretax profit margins by seven percentage points even as it spent $24 billion, up from $13 billion a year earlier.</p><p>It will take performances like that to keep Alphabet shares working. In 2025, earnings will likely end up north of $10 a share, up from the $9 Wall Street expected almost a year ago. Following the pattern, 2026 earnings would have to end up closer to $12 or $13 a share, up from the current $11, for the stock to keep working.</p><p>The good news is that there is nothing unreasonable about that scenario. Growth in Alphabet&#39;s cloud business, in particular, could be a catalyst for shares, says New Street Research analyst Dan Salmon. Currently, Wall Street expects Google Cloud to generate 2026 revenue of $75 billion, up from about $57 billion in 2025.</p><p>That growth is predicated on AI demand remaining robust, but there&#39;s no sign yet of slowing demand -- particularly after <a href=\"https://laohu8.com/S/NVDA\">Nvidia</a>&#39;s blowout earnings released on Nov. 19. And yes, that means more spending. The four main hyperscalers -- Alphabet, Microsoft, Meta, and <a href=\"https://laohu8.com/S/AMZN\">Amazon</a>.com -- grew sales 25% year over year in the third quarter and are expected to spend roughly $366 billion on new equipment in 2025, $478 billion in 2026, and $534 billion in 2027. Financing that spending will be a snap. All four companies have ample cash flow and pristine balance sheets, with easily north of $1 trillion in total borrowing capacity. If they decided to leverage their balance sheets for growth, there would be insatiable demand for their debt, says Matthew Eagan, a portfolio manager at Loomis, Sayles.</p><p>And with each iteration of the AI apps, the use case just keeps getting broader. Google&#39;s unveiling of its Gemini 3 AI model on Nov. 18 demonstrated that, rather than falling behind in the AI arms race, the company is closing the gap. The model includes new tools such as Deep Think, for projects that require more stringent reasoning; generative user interfaces; and improved &#34;vibe coding&#34; for software developers, among other benefits. Gemini has been closing the gap with ChatGPT, with 650 million monthly active users to ChatGPT&#39;s 800 million weekly active users. (The companies don&#39;t report like-for-like on users.)</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/50dbcc55c9fe523004055dbe0dcf2388\" tg-width=\"735\" tg-height=\"653\"/></p><p>While it&#39;s difficult to know which AI app will emerge as the winner, Alphabet has demonstrated its ability to generate value in the past -- and should be able to in the future, as the launch of Gemini 3 demonstrates. &#34;The early response seems to be kind of a wow,&#34; says Oakmark&#39;s Nygren. &#34;I don&#39;t really know why that should surprise people. Alphabet would have to have been heroically bad at investing capital to have not been at least in a co-leadership position.&#34;</p><p>For <a href=\"https://laohu8.com/S/EVR\">Evercore</a> analyst Mark Mahaney, Alphabet has proven that it can use AI to create new products that can create new revenue opportunities across all of its products. It may no longer be cheap, but its shares are still worth owning. &#34;GOOGL is no longer a Classic DHQ (dislocated high quality) stock, but the fundamentals and level of innovation here are very impressive,&#34; writes Mahaney, who has a $325 price target on the stock.</p><p>Trim positions if you have to, but hold on to the shares of this AI winner.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Google Has Been an AI Winner. What to Do With Alphabet Stock Now</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGoogle Has Been an AI Winner. What to Do With Alphabet Stock Now\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2025-11-24 15:32</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p>Stop searching for Big Tech&#39;s best artificial-intelligence stock. Alphabet has been the clear winner, and the gains could keep coming.</p><p>A year ago, the future looked bleak for the company. In August 2024, U.S. District Judge Amit Mehta had declared Google a &#34; monopolist,&#34; leaving investors to wonder if the internet search pioneer would be broken up. As that legal drama unfolded, OpenAI&#39;s ChatGPT went from one million users, days after its November 2022 launch, to 300 million weekly active users in December 2024, raising the question of whether Google&#39;s search business would be destroyed by AI. The fears left Alphabet stock trading for about 20 times estimated earnings for the next 12 months, the lowest price/earnings ratio for a Magnificent Seven stock, and below the S&amp;P 500&#39;s 22 times multiple.</p><p>What a difference a year makes. A breakup probably would have been nothing to fear, given that Alphabet has YouTube, self-driving ride-hailing company Waymo, the Android operating system, a cloud business, and foundational AI and AI-chip technologies -- parts that might have been worth more than the whole.</p><p>But it never came to that. In September, a judge came back with relatively mild penalties proposed on the antitrust front. And, despite worries that AI would disrupt Google, the company has shown a remarkable ability to adapt and grow, with four consecutive earnings beats under its belt and the recent launch of Gemini 3. The stock has gained almost 70% over the past 12 months and traded at a record high this week. Berkshire Hathaway even bought the stock.</p><p>The question now: What should investors do with the stock? Barron&#39;s recommended it 12 months ago, when we said it was undervalued by 50%. It did better than that. Shares now trade at 26 times earnings. About half of the gain came from a P/E multiple expansion, while the other half came from earnings growth.</p><p>While rapid gains often leave investors nervous, and itching to dump their biggest winners, investors should stay the course. Don&#39;t expect a repeat of the past 12 months, but good old business execution should help push shares higher.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/1cac44cae19860e4e7bd36ef8b6a6eb8\" tg-width=\"732\" tg-height=\"633\"/></p><p>&#34;The stock going from $160 to over $300 today has made it look less attractive,&#34; says Oakmark Funds portfolio manager Bill Nygren. &#34;[But Alphabet is] still not selling for more than we think it&#39;s worth.&#34;</p><p>For starters, Alphabet still isn&#39;t all that expensive. Even at 26 times earnings, it&#39;s the second-cheapest of the Magnificent Seven, with only <a href=\"https://laohu8.com/S/META\">Meta Platforms</a>, at 20 times, trading at a lower P/E multiple. The comparison between the two is telling. Both are making gobs of money, and both are spending lavishly on their AI capabilities. But whereas Meta isn&#39;t seeing much of a return just yet -- its pretax profit margins fell two percentage points year over year, while capital spending more than doubled to almost $19 billion from around $8 billion -- Alphabet has been getting more profitable. It grew third-quarter pretax profit by 39% and expanded pretax profit margins by seven percentage points even as it spent $24 billion, up from $13 billion a year earlier.</p><p>It will take performances like that to keep Alphabet shares working. In 2025, earnings will likely end up north of $10 a share, up from the $9 Wall Street expected almost a year ago. Following the pattern, 2026 earnings would have to end up closer to $12 or $13 a share, up from the current $11, for the stock to keep working.</p><p>The good news is that there is nothing unreasonable about that scenario. Growth in Alphabet&#39;s cloud business, in particular, could be a catalyst for shares, says New Street Research analyst Dan Salmon. Currently, Wall Street expects Google Cloud to generate 2026 revenue of $75 billion, up from about $57 billion in 2025.</p><p>That growth is predicated on AI demand remaining robust, but there&#39;s no sign yet of slowing demand -- particularly after <a href=\"https://laohu8.com/S/NVDA\">Nvidia</a>&#39;s blowout earnings released on Nov. 19. And yes, that means more spending. The four main hyperscalers -- Alphabet, Microsoft, Meta, and <a href=\"https://laohu8.com/S/AMZN\">Amazon</a>.com -- grew sales 25% year over year in the third quarter and are expected to spend roughly $366 billion on new equipment in 2025, $478 billion in 2026, and $534 billion in 2027. Financing that spending will be a snap. All four companies have ample cash flow and pristine balance sheets, with easily north of $1 trillion in total borrowing capacity. If they decided to leverage their balance sheets for growth, there would be insatiable demand for their debt, says Matthew Eagan, a portfolio manager at Loomis, Sayles.</p><p>And with each iteration of the AI apps, the use case just keeps getting broader. Google&#39;s unveiling of its Gemini 3 AI model on Nov. 18 demonstrated that, rather than falling behind in the AI arms race, the company is closing the gap. The model includes new tools such as Deep Think, for projects that require more stringent reasoning; generative user interfaces; and improved &#34;vibe coding&#34; for software developers, among other benefits. Gemini has been closing the gap with ChatGPT, with 650 million monthly active users to ChatGPT&#39;s 800 million weekly active users. (The companies don&#39;t report like-for-like on users.)</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/50dbcc55c9fe523004055dbe0dcf2388\" tg-width=\"735\" tg-height=\"653\"/></p><p>While it&#39;s difficult to know which AI app will emerge as the winner, Alphabet has demonstrated its ability to generate value in the past -- and should be able to in the future, as the launch of Gemini 3 demonstrates. &#34;The early response seems to be kind of a wow,&#34; says Oakmark&#39;s Nygren. &#34;I don&#39;t really know why that should surprise people. Alphabet would have to have been heroically bad at investing capital to have not been at least in a co-leadership position.&#34;</p><p>For <a href=\"https://laohu8.com/S/EVR\">Evercore</a> analyst Mark Mahaney, Alphabet has proven that it can use AI to create new products that can create new revenue opportunities across all of its products. It may no longer be cheap, but its shares are still worth owning. &#34;GOOGL is no longer a Classic DHQ (dislocated high quality) stock, but the fundamentals and level of innovation here are very impressive,&#34; writes Mahaney, who has a $325 price target on the stock.</p><p>Trim positions if you have to, but hold on to the shares of this AI winner.</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0823434583.USD":"BNP PARIBAS US GROWTH \"C\" (USD) ACC","LU1582986433.USD":"M&G (LUX) INCOME ALLOCATION \"A-H\" (USDHDG) INC","GOOG":"谷歌","LU2360107168.USD":"BGF NEXT GENERATION TECHNOLOGY \"A4\" (USD) INC","LU0128525929.USD":"TEMPLETON GLOBAL \"A\" (USD) ACC","LU0266013472.USD":"AXA WF - Framlington Longevity Economy A Cap USD","LU0006306889.USD":"SCHRODER ISF US LARGE CAP \"A\" (USD) INC AV","BK4507":"流媒体概念","LU2237443465.HKD":"abrdn SICAV I -  GLOBAL DYNAMIC DIVIDEND \"A\" (HKD) INC","LU0683600562.USD":"AB SELECT US EQUITY \"A\" (USD) ACC","LU1815336760.USD":"THREADNEEDLE (LUX) GLOBAL TECHNOLOGY \"AUP\" (USD) INC","LU0265550359.USD":"BGF SYSTEMATIC GLOBAL ENHANCED EQUITY YIELD \"A2\" (USD) ACC","LU2420271590.USD":"ALLIANZ SELECT INCOME AND GROWTH \"AT\" (USD) ACC","SG9999000418.SGD":"Aberdeen Standard Global Technology SGD","SG9999014575.USD":"UOB UNITED INCOME FOCUS TRUST FUND (USDHDG) INC","BK4023":"应用软件","LU2357125470.USD":"BNP PARIBAS ENERGY TRANSITION \"CLASSIC RH\" (USDHDG) ACC","LU1989763005.USD":"东方汇理教育基金A2 Acc","LU1699723380.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"AP\" (USD) ACC","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0426417589.USD":"NINETY ONE GSF GLOBAL FRANCHISE \"A\" (USD) INC","GOOGL":"谷歌A","LU2361044865.SGD":"WELLINGTON US QUALITY GROWTH \"A\" (SGDHDG) ACC","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","IE0001KFT4U8.USD":"FTGF CLEARBRIDGE GLOBAL GROWTH LEADERS \"A\" (USD) INC","IE00B4JS1V06.HKD":"JANUS HENDERSON BALANCED \"A2\" (HKD) ACC","LU0345774391.USD":"NINETY ONE GSF AMERICAN FRANCHISE \"A\" (USD) ACC","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","LU2361045086.USD":"WELLINGTON US QUALITY GROWTH \"A\" (USD) ACC","LU1697837992.HKD":"BGF DYNAMIC HIGH INCOME \"A6\" (HKDHDG) INC"},"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2585453425","content_text":"Stop searching for Big Tech's best artificial-intelligence stock. Alphabet has been the clear winner, and the gains could keep coming.A year ago, the future looked bleak for the company. In August 2024, U.S. District Judge Amit Mehta had declared Google a \" monopolist,\" leaving investors to wonder if the internet search pioneer would be broken up. As that legal drama unfolded, OpenAI's ChatGPT went from one million users, days after its November 2022 launch, to 300 million weekly active users in December 2024, raising the question of whether Google's search business would be destroyed by AI. The fears left Alphabet stock trading for about 20 times estimated earnings for the next 12 months, the lowest price/earnings ratio for a Magnificent Seven stock, and below the S&P 500's 22 times multiple.What a difference a year makes. A breakup probably would have been nothing to fear, given that Alphabet has YouTube, self-driving ride-hailing company Waymo, the Android operating system, a cloud business, and foundational AI and AI-chip technologies -- parts that might have been worth more than the whole.But it never came to that. In September, a judge came back with relatively mild penalties proposed on the antitrust front. And, despite worries that AI would disrupt Google, the company has shown a remarkable ability to adapt and grow, with four consecutive earnings beats under its belt and the recent launch of Gemini 3. The stock has gained almost 70% over the past 12 months and traded at a record high this week. Berkshire Hathaway even bought the stock.The question now: What should investors do with the stock? Barron's recommended it 12 months ago, when we said it was undervalued by 50%. It did better than that. Shares now trade at 26 times earnings. About half of the gain came from a P/E multiple expansion, while the other half came from earnings growth.While rapid gains often leave investors nervous, and itching to dump their biggest winners, investors should stay the course. Don't expect a repeat of the past 12 months, but good old business execution should help push shares higher.\"The stock going from $160 to over $300 today has made it look less attractive,\" says Oakmark Funds portfolio manager Bill Nygren. \"[But Alphabet is] still not selling for more than we think it's worth.\"For starters, Alphabet still isn't all that expensive. Even at 26 times earnings, it's the second-cheapest of the Magnificent Seven, with only Meta Platforms, at 20 times, trading at a lower P/E multiple. The comparison between the two is telling. Both are making gobs of money, and both are spending lavishly on their AI capabilities. But whereas Meta isn't seeing much of a return just yet -- its pretax profit margins fell two percentage points year over year, while capital spending more than doubled to almost $19 billion from around $8 billion -- Alphabet has been getting more profitable. It grew third-quarter pretax profit by 39% and expanded pretax profit margins by seven percentage points even as it spent $24 billion, up from $13 billion a year earlier.It will take performances like that to keep Alphabet shares working. In 2025, earnings will likely end up north of $10 a share, up from the $9 Wall Street expected almost a year ago. Following the pattern, 2026 earnings would have to end up closer to $12 or $13 a share, up from the current $11, for the stock to keep working.The good news is that there is nothing unreasonable about that scenario. Growth in Alphabet's cloud business, in particular, could be a catalyst for shares, says New Street Research analyst Dan Salmon. Currently, Wall Street expects Google Cloud to generate 2026 revenue of $75 billion, up from about $57 billion in 2025.That growth is predicated on AI demand remaining robust, but there's no sign yet of slowing demand -- particularly after Nvidia's blowout earnings released on Nov. 19. And yes, that means more spending. The four main hyperscalers -- Alphabet, Microsoft, Meta, and Amazon.com -- grew sales 25% year over year in the third quarter and are expected to spend roughly $366 billion on new equipment in 2025, $478 billion in 2026, and $534 billion in 2027. Financing that spending will be a snap. All four companies have ample cash flow and pristine balance sheets, with easily north of $1 trillion in total borrowing capacity. If they decided to leverage their balance sheets for growth, there would be insatiable demand for their debt, says Matthew Eagan, a portfolio manager at Loomis, Sayles.And with each iteration of the AI apps, the use case just keeps getting broader. Google's unveiling of its Gemini 3 AI model on Nov. 18 demonstrated that, rather than falling behind in the AI arms race, the company is closing the gap. The model includes new tools such as Deep Think, for projects that require more stringent reasoning; generative user interfaces; and improved \"vibe coding\" for software developers, among other benefits. Gemini has been closing the gap with ChatGPT, with 650 million monthly active users to ChatGPT's 800 million weekly active users. (The companies don't report like-for-like on users.)While it's difficult to know which AI app will emerge as the winner, Alphabet has demonstrated its ability to generate value in the past -- and should be able to in the future, as the launch of Gemini 3 demonstrates. \"The early response seems to be kind of a wow,\" says Oakmark's Nygren. \"I don't really know why that should surprise people. Alphabet would have to have been heroically bad at investing capital to have not been at least in a co-leadership position.\"For Evercore analyst Mark Mahaney, Alphabet has proven that it can use AI to create new products that can create new revenue opportunities across all of its products. It may no longer be cheap, but its shares are still worth owning. \"GOOGL is no longer a Classic DHQ (dislocated high quality) stock, but the fundamentals and level of innovation here are very impressive,\" writes Mahaney, who has a $325 price target on the stock.Trim positions if you have to, but hold on to the shares of this AI winner.","news_type":1,"symbols_score_info":{"GOOGL":2,"GOOG":2}},"isVote":1,"tweetType":1,"viewCount":390,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":["GOOG"],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":64,"optionInvolvedFlag":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}