GOOG

Alphabet Targets Capex in the Range of $175-$185 Billion in 2026

by

Image Source: TradingView By Brian Nelson, CFA On February 4, Alphabet (GOOG) (GOOGL) reported better than expected fourth quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecast. Consolidated Alphabet revenues increased 18%, or 17% in constant currency, to $113.8 billion. Management noted that it experienced strong momentum across the business and acceleration in growth in both Google Services and Google Cloud. Google Services revenues increased 14%, to $95.9 billion, led by 17% growth in Google Search & other, 17% in Google subscriptions, platforms, and devices, and 9% in YouTube revenue, which exceeded $60 billion for the full year 2025. Google Cloud revenue increased 48%, to $17.7 billion. Management had the following to say about the … Read more

Alphabet Remains a Net-Cash-Rich, Free-Cash-Flow Generating Powerhouse

by

Image: Alphabet’s revenues eclipsed $100 billion in the quarter. By Brian Nelson, CFA On October 29, Alphabet (GOOG) (GOOGL) reported solid third quarter results with revenue and GAAP earnings per share coming in better than expected. Consolidated revenues increased 16% (up 15% in constant currency) in the quarter, to $102.3 billion. Consensus was at $100.14 billion. Google Search & other, YouTube ads, Google subscriptions, platforms and devices, and Google Cloud all experienced double-digit growth in the third quarter. Google Services revenue increased 14%, while Google Cloud revenues jumped 34%. Adjusted operating income increased 22% on an operating margin of 33.9%. Net income increased 33%, while earnings per share increased 35%, to $2.87, better than consensus of $2.26. Management had the … Read more

Thinking Slow: 3 Research Blind Spots That Changed the Investment World

by

Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

Your Role as a Choice Architect

by

“As we’ve shown time and time again, you don’t need to look far to beat the market return (or, by comparison, to have a healthy diet). If something is not on the menu at Valuentum, it means the chef has something better cooking in the kitchen.” — Dear members: — Richard Thaler in his groundbreaking book Nudge (1), co-written with Cass Sunstein, talked about the role of the choice architect. A choice architect is basically someone or some organization that has the responsibility for organizing the context and content in which people make decisions. — A good example of a choice architect might be a cafeteria worker that has to decide how to organize the food in a buffet line … Read more

Alphabet Puts Up Excellent Second Quarter Results

by

Image Source: TradingView By Brian Nelson, CFA On July 23, Alphabet (GOOG) (GOOGL) reported excellent second quarter results with revenue and GAAP earnings per share coming in better than the consensus forecast. Consolidated Alphabet revenue in the second quarter increased 14%, or 13% in constant currency on a year-over-year basis. The company noted “robust momentum across the business,” with “Google Search & other, YouTube ads, Google subscriptions, platforms, and devices, and Google Cloud each deliver(ing) double-digit growth in Q2.” Google Services revenue increased 12% in the quarter, while Google Cloud revenues increased 32% in the period. Management had the following to say about the results: We had a standout quarter, with robust growth across the company. We are leading at … Read more

3 Undervalued Stocks to Consider Buying Now

by

Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

by

By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Alphabet Remains a Top Consideration for Long Term Capital Appreciation

by

Image Source: TradingView By Brian Nelson, CFA On April 24, Alphabet (GOOG) (GOOGL) reported blockbuster results for the first quarter, with both GAAP earnings per share and revenue exceeding the consensus forecast. Consolidated Alphabet revenues increased 12%, or 14% in constant currency. Google Services revenue increased 10%, while Google Cloud revenues advanced 28%. Total operating income increased 20%, while its operating margin expanded 2 percentage points to 34% in the quarter. Net income increased 46%, while GAAP earnings per share increased 49%, to $2.81. Management had the following to say about the quarter: We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI. … Read more

Trump Tariffs Higher than Expected; What We’re Doing

by

By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

Alphabet’s Cash Flow Soars in Fourth Quarter

by

Image Source: TradingView By Brian Nelson, CFA On February 4, Alphabet (GOOG) (GOOGL) reported mixed fourth quarter results with revenue missing the consensus forecast, but GAAP earnings per share outpacing what Wall Street was looking for. Total revenue in the fourth quarter advanced 12%, while operating income leapt 30.7% (thanks to a five percentage point improvement in its operating margin) and net income jumped 28.3%. Diluted earnings per share rose 31.1%, to $2.15 per share, in the quarter. We continue to like Alphabet as a top weighting in the Best Ideas Newsletter portfolio. Management had the following to say about the quarter: Q4 was a strong quarter driven by our leadership in AI and momentum across the business. We are … Read more