Consider a long position in Google (GOOGL), as its core search business maintains over 90% market share and has seen traffic grow despite AI competition. The company's value is further supported by its powerful ecosystem, which includes dominant assets like YouTube. GOOGL appears attractively valued, trading at approximately 27 times earnings, which is a discount compared to peers like Amazon (AMZN) and Microsoft (MSFT). This valuation is also below the NASDAQ average, suggesting a potential opportunity in the big tech sector. The investment thesis views Google as a resilient and undervalued leader in the technology space.

Google (GOOGL)

• The discussion centers on why the speaker remains long (bullish) on Google, despite the perceived threat from competitors like OpenAI.
• Market Dominance: Google maintains a dominant position in the search market with over 90% market share.
  • This market share has remained resilient even after the launch of ChatGPT.
  • As of May, Google's search traffic was reportedly up 49% year-over-year.
  • Its traffic was 96 times higher than the traffic to ChatGPT.
• Diverse Portfolio: Beyond its core search business, Google owns a suite of powerful assets.
  • YouTube: Described as the world's most popular streaming service, commanding more TV viewing time than Netflix and Disney Plus combined.
  • Essential Products: Google Drive, Gmail, and Google Maps are so integral to the internet that OpenAI had to use them in its own product demonstrations.
• Valuation: The stock is presented as attractively valued compared to its peers.
  • It trades at approximately 27 times earnings.
  • This is noted as being less than Amazon (AMZN), Microsoft (MSFT), and Apple (AAPL).
  • The valuation is also below the NASDAQ average and is roughly in line with the broader S&P 500 average.
• Speaker's Position: The speaker explicitly states they were long Google at $200 per share and remain long at the current price of $252 per share, indicating continued confidence.

Takeaways

• The investment thesis is that Google is a resilient, dominant company that appears undervalued relative to other major tech stocks.
• Despite the narrative around AI competition, Google's core search business is not only defending its market share but is also continuing to grow traffic significantly.
• Investors should consider the value of Google's entire ecosystem, including YouTube and its suite of productivity apps, not just its search engine.
• At a P/E ratio of 27, Google could be seen as a "cheaper" way to gain exposure to big tech compared to its more expensive peers. The bullish sentiment is strong, with the speaker holding their position through recent gains.