I am invested in some of the companies that are downstream of the capital expenditures of Big Tech (e.g., COHR), so I have nothing to complain about.

I am really struggling to see what's the investment thesis behind Google valuation increasing 2x in response to AI, though. Assuming no magical AGI singularity, by the end of the day, they're still selling the same services, but the services have gotten more expensive for them to provide. Everyone was already using Google Search, but now, provisioning AI summaries on top of requires more compute. Everyone was already using Google Docs and Meet, but now, AI features cost Google more. Etc, etc.

The only place where they stand to make money is selling AI compute to enterprises. But with the current supply-chain challenges, the margins there are probably getting thinner.

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haberdasher 2 hours ago | parent | next [-]

`I am really struggling to see what's the investment thesis behind Google valuation increasing 2x in response to AI`

Google is basically Nvdia (TPUs), Tesla (Waymo Self-Driving), Hyperscaler, Netflix (YouTube) and a massive VC (Anthropic, Databricks, SpaceX, etc.) all rolled into one.

Their valuation isn't really a 2x'ing so much as a reversion from halving.

	▲	cik 2 hours ago \| parent [-]
		It's frequently said that vonglomerates usually carry through as their valuation, the multiplier of the lowest holding. If that's the case, Alphabet is worth more broken up. Similarly that makes their current valuation (and nay any valuation) theoretically too low.

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nradov an hour ago | parent | prev | next [-]

The investment thesis is a torrent of cash arriving to index funds and retirement target date funds has to go somewhere.

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blehn 40 minutes ago | parent | prev | next [-]

Google is a good bet because if AI continues to boom, they're in a good position (frontier lab, vertically integrated). If the bubble bursts and the frontier labs fail, they might do even better.

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epolanski an hour ago | parent | prev | next [-]

I know several non tech companies that use Gemini and NotebookLM heavily (banks, insurance, consulting).

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senordevnyc 2 hours ago | parent | prev | next [-]

Google is a money printing machine, and their Q1 revenue and profit were up significantly vs last year.

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2 hours ago | parent | prev | next [-]

[deleted]

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solumunus 2 hours ago | parent | prev [-]

The market runs on memes, hype and fraud. Fundamentals haven’t mattered for a long time.

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senordevnyc 2 hours ago | parent [-]

I guess Google’s Q1 earnings of $62 billion were just hype.

	▲	ponkpanda an hour ago \| parent [-]
		Yes, earnings are essentially hype/BS. Focus on cash/cashflow.