GOOGL是A级投资；被视为保守的长期押注，尽管对资本回报不确定性和搜索业务演变存在疑虑，但仍持乐观态度。

So, what we'll do today, um, we have a tier list prepared. We actually have two tier lists. So, for one, we will talk about um the max 7 companies as you can see here. Plus, we have some extras. So, we will talk about the Max 7s like you know, Meta, Google, Microsoft, those those sorts of companies.

How about we start with one where I have a feeling for where it would land. Um, and we also just had a, you know, an episode of going through the earnings and I would say we start with Google. Um, obviously it's the biggest position in our portfolio. I think it's right now 15% of the intrinsic grow portfolio. Um, we just had earnings. The market didn't like them too much. Send it down 8%. But to be fair, I think was mainly about valuation.

Um I think you know both Google and Amazon had similar results where cloud grew just ex almost wouldn't say exponentially but accelerated in terms of growth um to I think growth rates especially for Amazon that we haven't seen in many years.

Um so the big problem is capex obviously um in terms of quality I think it's quite clear that Google will go into S tier. Um, I probably think we could debate what valuation looks like, but if we go for the coffee can approach, I would just put it out here. I would probably say Google S tier.

I'm pretty optimistic on Google. I don't know if I'm S tier optimistic, though. Um, there's there's a whole lot of capex, $200 billion in capex that's being spent. uh and we don't we don't know what the returns on that are are going to be.

Um and yeah, I don't know it it I think Gemini is um you know Google is doing a good job of integrating Gemini into everything. uh and it'll be really interesting to see if ultimately LLM get commoditized or if there is uh I guess we'll talk about this a lot with anthropic and open AI but whether there's a lot of value to be captured um on the cutting edge on the the frontier of the technology and you know I mean there was a brief moment last year where I think Gemini was seen as being one of the most advanced models and now um Anthropic and Claude it feels like have like very dramatically pulled ahead of Google.

And so, I don't know, we're talking about a 30-year perspective, and then we're also talking about like the fluctuations of, you know, positioning over the last year and and LLM technology. So, it's it's very subjective, but I I feel like um Alphabet is probably the most vulnerable um it's been in a long time.

Which is not which is not to say that they're hugely vulnerable or that like but I do think that there's a degree of uncertainty around the Google search business that wasn't fathomable five years ago. Uh and that's obviously the golden goose of the company. And that's not to say that they haven't done a great job diversifying. It's not to say that, you know, LLMs are going to erase uh Google search, but there's just a degree we don't know. um uh how people are going to query information 5 10 20 years from now and what that's going to look like and if Google search will will still have that same monopoly.

So for me if I'm really thinking you know long term Alphabet is is sort of like a conservative bet. It's almost like to me it's like the Silicon Valley version of Birkshshire Hathaway. like it's not it's not uh you know there's a bit of a lot of large numbers impacting it. There's a lot of capital intensity going forward impacting it. there's some genuine uncertainty around the core business and then like maybe if you draw keep the parallel with Birkshshire there's uncertainty around the capital allocation with Buffett and so like I to me is it is it S tier like uh that that I don't know I don't know I I would probably I would probably say a tier

Um, but yeah, I mean, in terms of the AI cap expending, it's just who knows where that's going to go. And I feel like if we went back a year from now, I think we probably wouldn't wouldn't have uh any problems with putting Google in the S tier there because, you know, it was before or maybe two years ago. Um, it it would be an S tier because it was just so obvious. But yeah, Sean, I think I think you're kind of right. You know, the the future of search kind of hard to know exactly where that's going to go.

Um, oddly enough, I actually find myself using uh using Google a lot now when I just want to query up something really really simple because if I put it on Claude, I know it's going to take like five minutes for me to get the answer. Whereas, if I use, you know, Gemini, which is embedded into Google, I get the answer basically right away, which I really really like.

Um, so yeah, I don't know. I I think I'm I think I'm probably okay with it being in the A tier, but I think honestly if Google's A tier, I don't know if we're going to get anything in the S tier.

Actually, I I thought you guys would certainly be on S tier. I feel like um I'll put it there first. But I agree. I think A tier makes a whole lot of sense. I think it's interesting how the narrative changed. Um you just said, Carl, that probably a year ago people would have put in S tier. I think a year ago people would have put it into Ctier. Um I think that's pretty much when we bought it for the intrinsic value portfolio at I think you know 150 160. Um which at that point people were sure that search will be will be gone in 10 years time and that Open AI and JPD will will basically take all of that.

I think by now it's a bit different. Um there was an interesting article coming out just I think last week about how Gemini will never have a top three LLM again. Um obviously that would be a point in terms of saying well you know they won't be up there again with Gemini.

Um and search at least changes. I think just as you Kyle I feel like personally I use search as much as before. It only changed how like before that I looked something up and then I clicked on a link on a website right this time I'm just looking at the AI overview and then I basically text one or two questions and answers back with them. So, it changed how I used it. Um, you could definitely argue, well, the question is how do they monetize that? Um, it looks and they tell us they monetize it in pretty much the same way that they did the the old search. Um, so so there's not a problem there.

Um, I just feel like I mean Charlie just said it, it feels like Silicon Valley Bureau like um again you could always say like coffee can approach 30 years out all of these are tech companies. All of these are in fields that are you know high innovation and maybe 20 years time all of these companies won't exist anymore. Um, if we look at these and I would have to choose just one company that still exists at that point, I think it would be either Google or the next one that I pull up now and that would be Amazon.

So um I actually thought Google would end up in S tier and then probably have to fight for Amazon in the A tier but I'm glad that we got it the the other way around and I I I fully agree.

And let's assume that's the price with AIPO. Um I don't know where would you put it. I mean maybe I I do a quick start with this one. I personally feel and I know that's by now um an opinion that most people in the market share and we actually have a video on YouTube which is called the AI masterclass um where somebody who's way smarter than than we are um talks about AI and how it works. Um and that was a couple of months ago and even then and it was not yet the the primary narrative back then. Um he said that basically the difference between these LLMs especially the frontier models is so small that it doesn't really matter. They will be commoditized and the main difference that people like us feel when we work with it every day is primarily about the context they give to the model and claude is incredibly good at delivering context. Um whether it be through co-work or cloud code but that's what it's good at.

I remember talking to my wife about it and saying you know like this could be this could be like a once in a-lifetime opportunity like this could be we may look back on this and see this is like investing in Google in like 2005 you know that was kind of not to say that that's my opinion now of open AI but that was like sort of the emotional intensity of the of the decision of like it felt like this could really be a life-changing investment if we if we go forward with it and and we decided not to.

it wasn't that long ago that it was a big deal when we had our first trillion dollar company and those were businesses um like Google and Apple that were generating you know tens of billions of dollars uh in revenue and and you look and and in profit too

the range of possibilities is so it's like an order of magnitude wider than what could happen with Alphabet and and Amazon where you know like there's still a wide range of possibilities um but Alphabet and Amazon aren't aren't going bankrupt

If we're talking about if we're talking about relative to to Amazon and Google, like it almost might be an F. Obviously I use Google every now and then.

if you're comparing this to Amazon or Google I mean not even close to the same quality in my opinion I mean especially if you compare alphabet's capex from now to just three or four years ago it's insane how quickly it's scaled up into the hundreds of billions

and especially if you look at businesses like Amazon or Google those businesses will be as strong as ever right like either AI will change how these businesses work but then they at the forefront because they're doing the investments and if it doesn't work out well well then they burned a lot of cash but they're also producing enough cash so maybe you know it burns two or three years of free cash flow which is not great but if that's the worst case outcome and we talking about a coffee can portfolio

I think just if you look back at the last 3 to four years it shows just you know Gemini I was on top, chat was on top, anthropic was on top. Now people use Chinese um LLMs.

Open AI had this incredible first mover advantage uh and they just totally botched it by focusing on the consumer and there were all these charts where it was like you know Chad GBT was the is the fastest product to 100 million users and it sounded really good and it looked really good but at the end of the day um people the average person is lazy and and doesn't care about the cutting edge technology. They just want a quick answer to whatever their question is. You know, they want to they want a lasagna recipe or they want to know like how to how to fix their lawn mower. You know, like you don't need the most advanced possible model for that. You're not going to pay for the most advanced model for that.

It's sort of an interesting idea, but different types of searches are are more valuable like to Google, right? Like if you're if you if you do a search for u you know some kind of product that you might buy um that's way more valuable uh digital real estate to sell to an advertiser um than if you you know Google some like scientific question that you want the answer to

I mean we put Google and you know Amazon here um in the ANS tier and then we put anthropic and uh open AAI in the ENF tier those have hundreds hundreds of billions in the backlogs of Google and Amazon.

I think the biggest risk for me is that currently if you look at the market valuations and I really liked Google at below $200 and that's where I built my position. Um I think that was a fair valuation for both of these companies now after earnings especially for Google and Amazon.

If you just ask me for the next I don't know two to three years I think things could also I mean there's a lot more risk um than there has been five years ago because what the market is currently valuing are numbers that have the idea in mind that anthropic and open AI would literally spend hundreds of billions of dollars in you know especially data centers but especially for the cloud with these companies and I think that's the biggest risk for me um where if I look at the backlogs and they look fantastic and most of them um you know they only run for 24 months So basically you would need Anthropic and OpenAI um to be viable companies and able to pay and raise money for the next two years which I think is reasonable um and yet I think that's a big risk um that a lot of the you know the backlog that Google and Amazon have and basically all the hyperscalers and many other companies in this field um that something will happen to that similar to what we saw in saw in 2000

um Microsoft has this huge distribution advantage which is one of the most important things in AI and yet if I compare them to to Amazon and Google I just don't see them at the same level if you ask me 30 years out which company would I rather own.

Although I got to say I think Sean you agree companies like Amazon or Google they are there for such a long time by now. I mean usually we you see these lists of like the top 10 20 um companies in the S&P 500 and how they change after 20 years. Well this time it should be around time for those companies changing. I don't yet see it. Um so I do have some confidence that we will see many of them in the future too.

So a lot of the you know we talked about the the circle of the circular deals and the deal flow generally in AI. It seems to be that whenever you look at Nvidia the market doesn't buy it when you look at Google or Amazon and their current valuations the market thinks that the money well for anthropic and open AI will actually land there.

Um, but it's not like Alphabet here where you're talking about, you know, several business units that can generate billions of dollars in free cash flow

but you know, with other businesses like um Alphabid and Amazon working on their own chips. I mean, who knows if their chips are even going to be in the lead and who knows how many years in advance.

And then maybe you could also see that as a sign. I mean, if you think Google is expensive today and I would still put it at a tier in terms of 30 years time, would I like to own it? Yes.

I Yeah, I would probably put it between A and B. I don't think it's as good as as Alphabet.

Um, but still when I look at Apple, see a business that's way less diversified than Alphabet.

I I kind of agree. I like the A between A and B I think makes sense to me because I don't think it's quite the same level as as as Google or Alphabet.

So if we should have glasses at some point that where actually can have all the you know gimmicks that Google I think just showed in one of their latest um latest glasses. I'm all for it.