“Alphabet (GOOGL): The Megacap That Still Might Be Underrated”
Alphabet is an exceptional business with a durable moat and strong growth, but it is now much closer to being fairly valued than it was a year ago due to increased capital intensity and uncertainty around AI returns.
About 18 months ago, Shawn pitched Alphabet as the cheapest of the Mag 7 back when the market was busy pricing in the death of search. But since that episode, the stock has roughly doubled and the death of search never actually showed up.
What did show up as a company that now plans to spend around $200 billion in a single year on data centers, has stopped buying back its own stock entirely, and has raised over hundred billion in capital to fund this spending.