Positive Catalyst for Alphabet via Specialized AI Chips Deal
"All right, so Alphabet will supply up to 1 million of its specialized AI chips to Anthropic. A deal worth tens of billions of dollars that deepens its partnership with the fast growing AI startup. I did not expect this deal to be this large. So really, really positive news for Alphabet. Not only does it get tens of billions of dollars in revenue, but it also gets to scale up the manufacturing, which will lower the cost per unit and improve its competitive positioning against rivals like Nvidia."
The speaker highlights a transformative deal where Alphabet supplies specialized AI chips to Anthropic, a move that could generate tens of billions in revenue and enhance manufacturing scale and cost efficiency. This deal is seen as a significant catalyst that improves Alphabet's competitive stance in the chip market and offsets other business pressures.
Buy Call on Alphabet Over Rally
"I ranked Alphabet stock as one of the best stocks to buy this year. So hopefully you saw that research and uh came to a similar conclusion as Alphabet stock has rallied. Now it's trading at a forward PE ratio of 25. It's about in the middle of where this stock has traded for according to this valuation metric going all the way back to 2016. So if you're interested in this kind of data, fisc.ai has this and much much more."
The speaker explicitly calls Alphabet (GOOG) one of the best stocks to buy, citing its current forward PE ratio of 25 which aligns with its historical valuation range. The commentary implies a bullish stance as the stock has rallied and data support from fisc.ai is noted to back up the analysis.
Bullish Commentary on Alphabet's Growing Cloud Revenue
"Okay, so I've highlighted here in their most recent quarter which ended June 30th. That's the most recent data we have available for Alphabet and their Google Cloud Business. In the same quarter that ended last year, they generated $10.3 billion in this segment, which increased to $13.6 billion most recently—a roughly 30% growth year-over-year. To put that into comparison, Amazon's web services increased by around 17%. Even though Google Cloud is still a small part of overall profitability, this deal could add north of $2 billion annually, making it great news for Alphabet stock investors."
The speaker outlines strong growth in Alphabet's Google Cloud segment with a 30% year-over-year revenue increase. He highlights the potential for a multi-year deal that could boost annual revenue by over $2 billion and compares these gains to Amazon's lower growth rate, establishing a bullish case for Alphabet.