저자: UnrivaledInvesting진행자 · 외국인
요약 보기
버크셔의 알파벳 4억 달러(약 40억 달러 오기 가능) 매수 소식과 Gemini 3 출시 기대로 알파벳 주가 강세. 알파벳 실적(매출 성장 가속, 영업이익률 30%대, 클라우드 34% 성장)은 우수하나 검색 광고 변화 위험 존재. 발언자는 가치 평가 프레임워크로 Google 서비스 2~5조달러, 클라우드 0.5~1.7조달러, 기타 베팅 2000~4000억달러 제시. 현재 시총 대비 20~40% 하락 여유를 두고 매수 고려 의견을 밝힘. 버크셔의 차세대 경영진 투자 의미도 강조.
다듬은 글
Warren Buffett's Berkshire Hathway disclosed that while they were a net seller of stock during the third quarter this year, one stock they did start buying was Google around $4 billion worth of the shares. This news along with the speculation that management at Alphabet is feeding that they are expected to launch not only a cutting edge model but the cutting edge model Gemini 3 this week I believe is causing Alphabet shares to rally today adding tens of billions of dollars to the market cap which is causing some investors to wonder if they should piggyback with deep value investor you know Warren Buffett.
Technically I don't think it was Warren Buffett buying the shares. I'd be surprised maybe it was. it's more likely to be either Ted Wesler or Todd one of his lieutenants overseeing Berkshire Hathway's equity portfolio. And so a lot of folks are wondering, hm, you know, should they follow along with what Bergkshire Hathway has done?
So in this video, we're going to walk through sort of the highlights thinking about Alphabet's latest results, thinking about the valuation framework in the years ahead. And this framework, this is actually from Flash. This is flash is a free-touse AI tool leveraging the most cutting edge models available at the at any given day and you know you can check out any company in the world for free and it'll provide a framework to think about you know how a stock might perform in the years ahead.
In this case, this this usage of Flash, it doesn't always use Google, but this is using what's available from Google and it's saying based on Google's models that Alphabet in the years ahead has roughly 80% upside and maybe 60% downside. Personally, I think this is too conservative when I think about the the framework over the next five years, and we're going to talk about that in this video.
Uh once again, feel free to check out Flash, see the link below. Looking at Alphabet's results, I mean, these are fantastic numbers. You can see revenue actually accelerated year-over-year. There aren't many hundred billion dollar revenue companies posting accelerating growth. This is just incredible.
And meanwhile, they're posting 30% operating margins. This is also similarly a league of their own in terms of that type of profitability, that type of scale, and accelerating. I love to see it. That means a lot of free cash flow for this business and a lot of growing earnings. This is why Alphabet has done so well.
Let's dig a little further to understand what's going on beneath the surface level. What's driving these results? So you look at Google search and their other core Google properties and Google maps revenue growing up about 15%. These are incredible figures. YouTube ads similarly growing around 15%. These two are powerhouses in the advertising industry.
Google Google network however this is powering thirdparty websites actually shrunk and I think this fundamentally reflects the changes that's going on with user behavior and AI which is that now when you start your search maybe it might be with you know chat maybe it's with Gemini you're asking a question and now AI might just say here's your answer as opposed to saying [snorts] here are different sites you might want to check out for your answer.
It's a big difference and that impact of you not going to that third party site means less advertising revenue for those sites and that's why I believe you're seeing this contraction. So they're either either a structural issue going on or they're fundamentally losing market share. I'd argue their core properties are gaining market share.
So this is a key aspect to think about with this business. When you think about subscriptions like for example a paid YouTube subscription their devices like Android Pixel you know this is also doing quite well around 21%. So combined Google services when you think about all these different things up around 14%.
Very very solid. Google cloud posting accelerating figures up 34% proving imp you know showing improving profitability. This is also suggesting, hey, maybe there's some sort of advantage where you can leverage Google's cutting edge models, but in order to do so, you're going to want to leverage their cloud infrastructure.
So, it sort of goes handinhand driving that growth. Something to think about in terms of their potential. And then another key aspect is not only are you posting this fantastic growth, you could see revenue growing around 16%. But the cost in terms of acquisition cost of of people to actually look at the ads or the number of employees, the fundamental operating cost to run your business.
This is showing that hey, we only needed to grow our employees by 5%. I suspect if they wanted to go, yeah, for a couple of quarters, maybe we don't want to grow our employees at all. I don't I don't necessarily think that would be an advantage for them, but if they wanted to, they could really show this is a 40% plus operating margin business.
if they wanted to. I I'm not I'm not sure they will, but it is important to think about that when you're considering, you know, Alphabet and this is just it's just an amazing business when you're when you're looking at these results. But maybe all this doesn't matter. Maybe what really matters is that they are investing for the future thinking about how do we get to super intelligence and they're launching Gemini 3 supposedly this week.
Supposedly, this is another big breakthrough in terms of AI capabilities. But this is the race and you have Larry Page, one of the co-founders of Google, saying reportedly in several different instances saying, "I'm willing to go bankrupt rather than lose this race." Talking about the race to AGI and artificial, you know, general and then super intelligence, saying this is an all-in bet.
And you're starting to see it with the numbers. You're seeing massive amounts of either debt being raised. Just earlier this month, they announced raising over $20 billion of debt. They also announced expected projects in the tens of billions of dollars. So this it's kind of an interesting signal when you see a company like Google that's posting 30% margins, incredible growth, you know, hundred billion dollar revenue in a quarter, growing so quickly, incredible, you know, profitability, then raise money.
What's going on here? I think that's a testament to how big of a challenge, how big of a project this is. and they they're saying to themselves, we don't know for sure if the return on, you know, investment is going to prove itself. I think it will, but they're making this bet saying, you know, you have Sam Alman talking about trillion dollars, you know, sort of commitments for OpenAI over the next, you know, let's say 5 to 10 years.
So Google saying we are not only do we have our hundred billion dollars let's say in cash flow per year but we're going to put we're going to be tapping the capital markets as well. We're going to be borrowing money. We're all in on this. That is the signal that you're seeing from you know Alphabet or Google here as well.
And so then looking at all the different pieces, what's it worth? What's it worth today as we think about it? Because there's so much that's going on with Google. I mean they I've just sort of showed you how they break it out available for shareholders but I think there's another layer that's important to reflect on you know as as you think about the valuation.
First of all none of this is financial advice. I'm just sharing my personal thoughts on Alphabet. Also recently San C a premium subscriber wrote I initially signed up for the light subscription to test the waters. Since then your analysis and insights have provided so much amazing value I've regretted not going allin from the beginning.
He's talking about unrivaled investing. If you're looking for compelling ideas, come check it out. So, when I think about Berkshire buying Alphabet shares, I actually an equally important takeaway for me personally is that I'm very glad to see this. Not necessarily because I'm saying Alphabet is deep value, but I, you know, I used to go to the the Berkshire Hathaway shareholder meetings with my dad, you know, years ago.
And I have been calling out for years now that I think Bergkshire would have been better off making small bets on Amazon, Google. This was before they did al the their giant Apple bet. Like when they did IBM, I was like, why would do that versus Google? It didn't make any sense to me. So seeing that the next generation team is willing to make this bet is very important as I think about the potential for Google uh excuse me, the potential for Bergkshire in the years ahead because this means this isn't just a Dairy Queen company.
This isn't just a legacy energy company or railway company. This is a company that has the capital. They have hundreds of billions of cash that they can then redeploy in Google. They could go out and buy hundreds of billions of Google in the next year if they wanted to. And so that in my opinion fundamentally changes the trajectory of how Berkshire can perform in the years ahead.
So for investors that want to think about hm you know maybe I want something that has the protections of a Fort Knox type of balance sheet like Berkshire Hathaway and just these incredible operations just world's best reinsurance operations that sort of thing and maybe a a bet on these forwardinking companies like Alphabet.
So I I find that this announcement is actually much bigger than the $4 billion because in my opinion it reflects the next generation of Berkshire and Bergkshire's managers could lean into this type of growth and incredible companies. It's not just these legacy bets from Warren Buffett. So, I'm very I'm I'm personally excited to see that and and I and I do look forward to revisiting Berkshire uh you know to see hey do I want to you know scale this up or do I want to buy this you know for myself personally and so I I I call that out partly because what what was Buffett also buying this quarter?
If you go back to the very beginning of the video, you know, one of the positions he was buying was Chub. That's an insurance company. One of my largest holdings is an insurance company. So insurance companies can do great in this environment where let's say interest rates are unlikely to go back to zero and if interest rates spike up let's say because if corporate bonds spike up it could be an opportunity for some insurers.
So I I look at this and I I find this to be very interesting for Berkshire. Now thinking about Google or Alphabets's valuation, let's focus first on their Google services, their ad business plus, you know, the Android and you know their pixel, their hardwares. And so they're growing, this business is growing low teens this year, you know, on a year-to- date basis.
So I'm pl sort of plugging that in and then assuming optimized margin somewhere around 40% sort of giving them the full benefit of the doubt and then thinking about where do they grow in the years ahead. I'd argue my high case here doesn't give them full credit to hey, what if there is truly an AI revolution and you can start getting significantly faster revenue growth because partly this is still really a a revenue a a a business where the majority of their revenue is advertising.
And so if you have some sort of cyclical impact and we are seeing signs of a struggling consumer, if you have that sort of play out, even if you have a really cool AI product that's taking off and you know changing industries, changing how you research medicine, let's say, but you have a core advertising business that's also shrinking or fundamentally changing.
And that's been my hesitance with Alphabet up until this point. So I think this is this is the one that's the wild card. I'm I'm providing a 15 to 25 times earnings range, you know, multiple range in the years ahead. And this is saying just their Google services excluding everything else. You're saying maybe there's 40% upside, maybe there's 40% downside.
But, you know, this this alone, I would say, is just a hyperconservative perspective because it's only looking at Google services. You need to consider everything else like their cloud. cloud, I'd argue, is worth somewhere between a half a trillion dollar and $1.7 trillion. And then you could I mean, look, the market cap's already $3.5 trillion when you're looking at this.
So these are these are incredible scale in terms of where it is. But you got to think about all these different pieces. Google services somewhere between two trillion and five trillion. Thinking about cloud, you need to layer that on. You need to think about other bets. Unclear how that ultimately shakes out, where Whimo shakes out, where they're, you know, some of these AI bets play out, potentially changing medicine.
We'll see. Then you have their cash. You have they I think they're a large shareholder in SpaceX that's also throwing in into equity. So overall I think the initial AI report that I showed at the beginning which once again was powered by Google uh interestingly enough not not always flash will use whatever model I think it's best at any given point but looking at this it's in my opinion this is a hypothetical framework stock price go higher can go lower depends on how management executes depend on you know sentiment but looking at these pieces I understand why Buffett or Bergkshire Hathway was buying stock in Google.
It does have that sort of symmetry that I think is favorable where if you have continued favorable execution, if you have some multiple expansion, you're possibly compounding at close to 20% over the next 5 years. Whereas in the lower case, assuming multiple contraction, you're not really getting significant growth in their core Google segment.
Partly because maybe AI is growing, but advertising takes a hit. We're not seeing that yet. But if you if you were to sort of roll that out then maybe you're closer to break even over the next five years. So that you know one perspective it works out the other closer to break even. Personally I would rather not chase and I'd personally rather consider a scenario where the low is closer to 20 30 40% minimum upside.
So that is a bit of a haircut from where it currently trades. But maybe [clears throat] that's where Bergkshire was buying it because the stock has rallied significantly. I hope this video walking through how to think about the different pieces. You have core Google services that includes their advertising includes YouTube, you know, and that that nets in, you know, their subscriptions, their hardware, and then you have their Google cloud, which is their infrastructure play, which is growing at a fantastic clip.
You know, thinking about these two different pieces, and then you have all these other bets, you know, that they're making like Whimo can be a gamecher in the years ahead. So think about, you know, layering on other bets. I put in somewhere between 200 and $400 billion in value. If you think it's more, think about that in terms of that framework I was just showing you.
I hope this video thinking about Alphabet has been helpful. Think about not only Alphabet, but also Berkshire Hathway. .
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