Hello everyone! Today i want to share some trading analysis with you!
1.
Everybody is so fixated on how undervalued $Alphabet(GOOG)$ but $Amazon.com(AMZN)$ is even more undervalued.
$Amazon.com(AMZN)$ spent $41 billion more on R&D last year than $Alphabet(GOOG)$ .
If $Amazon.com(AMZN)$ had spent only as much as $Alphabet(GOOG)$ , it would have been trading at 20 times trailing earnings.
Two words: Great opportunity.
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2.
$Robinhood(HOOD)$ is by far the most innovative fintech but it’s not killing $SoFi Technologies Inc.(SOFI)$ .
Banking looks huge but it’s a very different business than brokerage.
You are not going to be very competitive when you rely on a banking partner rather than owning the charter yourself.
Innovation cycle is going to be longer, control over lending decisions will be limited, and most importantly it’s a very narrow margin business that $Robinhood(HOOD)$ doesn’t have experience with.
Still, HOOD can nail it, and even in that case it’s not a winner takes all market and SOFI will keep executing.
I own SOFI, and I would love to own HOOD too if the valuation becomes more attractive.
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3.
$Alphabet(GOOG)$ share of commercial queries has been increasing and will keep increasing as people increasingly use AI for informational queries.
The real threat for GOOG search is not general AI models, it’s specific agents that’ll execute commercial intent.
There are two ways such agents could work:
1) Through a system like computer use
2) Or through aggregation
In case of computer use, agent will use your computer and will likely start its workflow from Google. For instance, if you want it to book a hotel, it’ll likely start with a search query.
In case of aggregation, specialized agents will aggregate options and pick among them. It’ll be like an agent doing the job inside AirBnB instead of you.
Second option isn’t that valuable in my view as it’ll still require us to use different vertical agents for each task. Not that different from what we are doing right now. In this case, incumbents will likely win the verticals they are already dominating. For instance, Booking’s embedded agent will likely be the most widely used AI travel agent. In this path, GOOG will likely become irrelevant.
First option is much more AGI like. It’ll bring you a few best options, you will pick among them, and it’ll execute the rest. In the meantime, GOOG will keep receiving its search queries, just not by you but by a computer using AI.
If the market evolution follows the first path, GOOG search growth could even accelerate as AI can search infinitely more and faster than humans.
On top of those, GOOG coul be the foundational model provider to those vertical agents.
It’s way better positioned for the age of AI than many people think.
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