Google is favored over Meta; strong ecosystem and >80% cloud growth support the thesis despite rising CapEx ($325-350B next year).

we currently have holding we were currently in Google. So, um and we still think actually Alphabet or Google has a stronger holding.

And that's mainly because of the the entire ecosystem that it has, which obviously includes um the the search, it includes also, of course, YouTube. But besides that, it includes that segment that actually grew over 80% last quarter, and that's cloud.

So, it benefits from cloud in terms of, you know, other companies having to basically get out there and um and uh implement a their AI strategies on Google's GCP. And then also, obviously, utilizing uh Gemini.

And Gemini, as you know, uh targets more enterprise uh clients rather than consumers, which is, you know, where where Meta's uh agentic AI is uh is currently targeting.

So, uh for those for those few reasons, we, you know, we we still favor uh Google uh over Meta,

Yeah, so as far as Alphabet is concerned, listen, the CapEx spend is is generating real revenue and you kind of see it really from that 80% plus growth rate here from the cloud business as well as what they're doing just across their entire ecosystem and the growth rates you're also seeing you know across search among other areas.

But when you kind of think about the CapEx trajectory or our view of the CapEx trajectory over the next 2 years is probably going to be much greater than what the street is looking at.

I think you're looking at potentially 325 350 next year and I think following you're probably going north of 400 billion.

I don't think you continue to have that 80% plus growth rate, but you're going to have very attractive growth rates here over the next couple quarters north of 50%. It'll decelerate over time, but when you start looking out here over the next 6 to 8 quarters, this is a business that's you know going to represent at some point over a third and even more of their revenue.

So it's it's translating to real revenue and you know especially as they now start ramping up the the hardware piece of that cloud business.

Do other cloud providers then, I mean Google we can put AWS and Azure in here too. Do they have to match that same level of protection now just to convince users that their data is safe?

At the same time, you know, if you look back it may set a bad precedent for for Google and its YouTube and and Shorts.

However, if you look at what Google how Google has responded historically is that it has gradually adjusted its policies, its video editing policies, its restrictions and so forth towards where it thinks things will be moving from a regulatory standpoint.

So, to answer your question, I don't think it should be discounted too much on on Google or Alphabet.