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re: MSFT, AMZN, GOOG
Posted on 6/3/26 at 10:04 am to Boomer Rick
Posted on 6/3/26 at 10:04 am to Boomer Rick
That was in February. What was their decline compared to everybody who took hits due to AI-related capex? How did they rebound?
Gemini taking huge steps forward and possibly being the leader (or #2 behind Claude) showed the capex wasn't fruitless. Remember how far back Gemini was when Google started? How people left it for dead compared to ChatGPT? The script has flippped.
Gemini taking huge steps forward and possibly being the leader (or #2 behind Claude) showed the capex wasn't fruitless. Remember how far back Gemini was when Google started? How people left it for dead compared to ChatGPT? The script has flippped.
1
Posted on 6/3/26 at 10:20 am to SlowFlowPro
Nobody said Google is a bad company — I own a significant position. The point is simple: Broadcom, Marvell, Micron and the AI buildout beneficiaries have dramatically outperformed the companies doing the spending. That’s capital rotation, not opinion.
Google dropped 6% on its capex announcement in February despite strong earnings, then dropped again this week on its $80B equity raise. Two clear instances of the market punishing capex spending this year alone. Painfully obvious.
Google dropped 6% on its capex announcement in February despite strong earnings, then dropped again this week on its $80B equity raise. Two clear instances of the market punishing capex spending this year alone. Painfully obvious.
Posted on 6/3/26 at 11:43 am to Boomer Rick
quote:I'm not saying you're wrong, but it just seems like an overstatement. What P/E do you think the stock should trade to? How much higher than $5T should it be worth?
On February 5, 2026, Alphabet shares dropped 6.1% to $312.64 after announcing capital expenditure guidance of $175-185 billion for the year — far exceeding analyst expectations of roughly $115 billion. This happened despite strong Q4 earnings.
Just this week — Monday June 1 — Alphabet announced an $80 billion equity offering to fund AI infrastructure, and shares declined again on dilution concerns despite Berkshire Hathaway participating with a $10 billion investment.
So, yes, two clear examples this year that they’ve been punished. End of story.
Posted on 6/3/26 at 12:01 pm to Big Scrub TX
Ok, so what word would you like me to use? Discounting? JFC
Posted on 6/3/26 at 12:29 pm to Boomer Rick
quote:Not sure. Being long GOOG has been a massive winner. Not sure why we have to come up with a negative spin in the first place.
Ok, so what word would you like me to use? Discounting? JFC
Posted on 6/3/26 at 1:02 pm to Big Scrub TX
What are you talking about? I love alphabet but the market is presently punishing/discounting them for their cap spend and capital has flowed elsewhere. That’s an observation.
Their quarterly CC was the best I’ve heard in 2026.
Personally, I think they will execute and be a 10 trillion market cap company someday (possibly in 5 years).
Their quarterly CC was the best I’ve heard in 2026.
Personally, I think they will execute and be a 10 trillion market cap company someday (possibly in 5 years).
Posted on 6/3/26 at 1:24 pm to Boomer Rick
quote:That would be about a 15% IRR from here if it comes true. Had they not already been "punished", what lower IRR would you find more appropriate from a higher value?
Personally, I think they will execute and be a 10 trillion market cap company someday (possibly in 5 years).
Your argument seems to be that executing on some of the biggest capex of all time in possibly the most transformative space of all time should result in lower than a 15% IRR.
Posted on 6/3/26 at 1:32 pm to Big Scrub TX
My original point was simple — the market is currently discounting Google relative to AI capex beneficiaries like Marvell, Broadcom, and Micron. That’s an observable fact, not a negative take on Google. I own a significant position, their last earnings call was the best I’ve heard all year, and I think the capex pays off long term. A 15% IRR to $10 trillion sounds pretty good to me. Not sure what we’re even disagreeing about at this point.
Posted on 6/3/26 at 2:44 pm to Sabans straw hat
If you're looking for upside/growth, go with companies involved with the AI infrastructure: NVTS, SNDK, ASML, MU, ALAB, VRT, TSM, NVDA.
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