Jared Cohen, president of global affairs at Goldman Sachs and co-director of the Goldman Sachs Global Institute, said in an interview with CNBC as part of a latest program that amid growing demand for energy linked to data due to AI, the United States should collaborate with others. countries via “diplomacy”.
Responding to the question of whether a return to relatively cheaper and reliable energy sources, such as coal, could satisfy AI-driven energy demand, the analyst said the United States should still look at beyond simple dependence on their own sources, because energy needs are enormous.
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Number of hedge fund investors: 160
Deepwater Asset Management’s Gene Munster said in an interview with CNBC that Alphabet Inc’s (NASDAQ: GOOG) latest quarterly report was one of the most important in years as investors looked for the impact of Generative AI on search activities and business performance. insights into AI.
“I think this is probably the most important Google report in maybe 7 to 10 years, something there. The reason is that 7-10 years ago there was a lot of debate about the impact of mobile on business. Of course, that’s been the talk around Google over the last year: what impact AI is going to have on the business. What we saw in their U.S. business, where AI Previews had its first full quarter, was that expectations were for 12% growth, but it grew 19%. I think this is the first proof, and the call is just a chorus of comments about how AI insights are positively impacting the business. Now, we’re not out of the woods yet for Google investors, but I think this is the most encouraging data point after a lot of concern over the past few quarters.
The market has ignored Alphabet Inc’s (NASDAQ: GOOGL) major non-core businesses and the stock remains undervalued despite concerns over AI research and regulatory onslaught.
With forecast EPS of around $9 for 2025, Alphabet (NASDAQ: GOOGL) could reasonably earn a profit closer to $10 if it maintains its historical outperformance rate. With projected EPS of $10, Google’s forward P/E multiple would be around 17, a relatively low valuation for a diversified market leader.
What are the key drivers of Alphabet (NASDAQ: GOOGL)?
Alphabet Inc (NASDAQ: GOOGL) remains on track to reach $100 billion in YouTube Ads and Google Cloud revenue by the end of 2024. In its autonomous driving division, Waymo has shown notable progress , with paid autonomous rides growing 200% during the quarter. -more than a quarter at 150,000 weekly journeys at the end of October, thanks to a fleet of 700 vehicles in service since August.
This growth is significant: Waymo vehicles now average about 30.6 autonomous trips per day, which is significantly higher than Uber’s average of 4.18 daily trips per driver, based on 31 million daily trips. and Uber’s 7.4 million drivers last quarter. This performance highlights Waymo’s competitive advantage in autonomous ride volume over traditional ride sharing.
In the third quarter, Alphabet Inc’s (NASDAQ: GOOGL) Research and Others segment reported a 12.2% year-over-year revenue increase from $44.03 billion to $49.39 billion. YouTube advertising also performed well, with revenue up 12.2%, from $7.95 billion to $8.92 billion. Meanwhile, Alphabet Inc’s (NASDAQ: GOOGL) subscription, platform and device revenue grew even more strongly, increasing 27.8% from $8.34 billion to $10.66 billion. dollars.
Google Cloud has been growing steadily, with revenue increasing from $13.06 billion in 2020 to $33.09 billion in 2023. Google Cloud notably became profitable for the first time in 2023, posting a profit of ‘operating revenue of $1.72 billion, a significant improvement from a loss of $5.61 billion in 2023. 2020. This segment’s performance continues to strengthen, with the latest quarterly revenue reaching $11.35 billion, up 35% from $8.41 billion in the same period last year.
Alger Spectra Fund stated the following regarding Alphabet Inc. (NASDAQ: GOOG) in its Letter to investors for the third quarter of 2024:
“Alphabet Inc.. (NASDAQ: GOOG) is the parent company of Google and a global leader in digital services and technologies. Its main operating segments include Google Services (Search, YouTube, Google Play, Maps, etc.), Google Cloud Platform (GCP) and Other Bets (innovative companies such as Waymo and Verily). Google services generate the bulk of Alphabet’s revenue, primarily through advertising. Their GCP provides infrastructure and tools to businesses, including AI and machine learning services. Alphabet has widely integrated AI into its products, improving search algorithms, personalizing content on YouTube, improving ad targeting, and driving innovations like Waymo, their self-driving segment. While the company reported better-than-expected revenue and profits in the second quarter, thanks to strength in search and GCP, YouTube’s ad revenue fell short of expectations. Separately, investor skepticism about the return on investment from Alphabet’s large capital expenditures on AI infrastructure has also weighed on the company’s stock price. Despite overall positive operating results, shares detracted from performance.
Overall, GOOG ranks 3rd on our list of trending AI stocks to watch in December. While we recognize GOOG’s potential, our belief lies in the belief that, under the radar, AI stocks hold more promise in terms of higher returns in a shorter time frame. If you’re looking for an AI stock that’s more promising than GOOG but is trading at less than 5x earnings, check out our report on cheapest AI stock.
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Disclosure: None. This article was originally published on Initiated Monkey.
