ChatGPT said:Google is a super-strong company with a huge moat, great growth, and a healthy balance sheet — and that’s why Buffett finally bought it.But even though Google is high quality, the stock looks pricey today, so other opportunities might offer better returns right now.
Good analysis. Google is a wonderful company but the price is not fair right now. Besides, the new wave of AI chat products—including Google’s own Gemini—could also pose a potential risk by substituting for Google’s core revenue driver: search advertising.
This investment has got to sting his buddy Gates. Both excellent businesses with great moats and large enough to easily absorb Berkshire level capital. Maybe Berkshire is holding at arms length due to their personal relationship.
To be honest I don't like it that you advertise Google as a Buffet purchase for retail investors. Most probably it is a Ted or Todd purchase. Buffet mentioned many times during the AGMs that he doesn't touch ~30B portion of the portfolio that Ted and Todd manage. The minimum would be to point out that it is most probably not a Buffet purchase and not to go with the hype headlines.
I've written a piece that may be of interest to you concerning the 56% revenue concentration in Google Search and how this could decline due to LLM usage. It is a bit dated by now but I think the principles still hold up.
Interesting business review. There is maybe a small typo in your article
You compare EPS Growth and FCF Growth
"EPS Growth past 5 years (CAGR): 31.4% (FCF growth > 7%? ✅)
EPS Growth past 10 years (CAGR): 24.1% (FCF growth > 7%? ✅)"
Thanks! It should say EPS growth between brackets
Buffett obviously wasn't the one buying Google. If it were Buffett, it would have been $50B+.
Good analysis. Google is a wonderful company but the price is not fair right now. Besides, the new wave of AI chat products—including Google’s own Gemini—could also pose a potential risk by substituting for Google’s core revenue driver: search advertising.
I agree with Bruno.
This investment has got to sting his buddy Gates. Both excellent businesses with great moats and large enough to easily absorb Berkshire level capital. Maybe Berkshire is holding at arms length due to their personal relationship.
you didnt address chatgt potential effect on GOOGL revenues
It's in the risk section!
To be honest I don't like it that you advertise Google as a Buffet purchase for retail investors. Most probably it is a Ted or Todd purchase. Buffet mentioned many times during the AGMs that he doesn't touch ~30B portion of the portfolio that Ted and Todd manage. The minimum would be to point out that it is most probably not a Buffet purchase and not to go with the hype headlines.
Hi Kristof,
I hear you. And to be honest I think you are right. I don't think Buffett is making a lot of investment decisions at Berkshire Anymore.
Are you going to the Berkshire AGM next year? Would love to see you there!
hi
I've written a piece that may be of interest to you concerning the 56% revenue concentration in Google Search and how this could decline due to LLM usage. It is a bit dated by now but I think the principles still hold up.
https://open.substack.com/pub/armstrongap/p/googles-llm-problem?utm_source=share&utm_medium=android&r=1vxcgi
Crypto will rally next
What has that got to do with an analysis of Alphabet?
typo in the total quality score table under "valuation" : forward valuation should read 27.6x, not 42.5x
Correct. Will adjust. Thanks for highlighting!