GOOGL
🤔 While Google’s Gemini 2.5 AI model is technically strong and benefits from ecosystem integration (Maps, Calendar), it struggles against ChatGPT’s ‘top of mind’ status among users.
📉 AI is not yet significantly cannibalizing Google’s most profitable search queries (e.g., local services), but the long-term risk is acknowledged, leading to a reduced position size by the speaker.
⚖️ The company’s valuation is seen as more acceptable now compared to other large caps, but the increased competitive risk from AI justifies caution.
@Academiadeinversion:
“Regarding Google, I know Paco, you hold it or have held it. My doubt is how you see it currently. I’m an AI user, and I believe that, little by little and rightly so, it’s taking over the search business. For me, there’s no comparison anymore. Google search has become outdated and is no longer useful. The company has reached an acceptable valuation compared to other large caps, mainly, I understand, because of this. How do you see it? Don’t you think Google has an ace up its sleeve, even if it’s to cannibalize itself and its biggest business, advertising? That could make betting on their future a blind leap, but it’s getting to a good price, an act of faith that they’ll do something sensible. Well, at the search level, for now, artificial intelligence isn’t cannibalizing the most profitable searches. For example, when you search to buy, not so much, I mean, some part yes, but not the most profitable searches, like searching for a nearby florist, searching for a locksmith, searching for a… well, there might be people using it, but generally, Google remains top of mind for these things, while artificial intelligence is still used for more tailored solutions. I’m speaking, I insist, generally; yes, there are people still searching for tailored solutions on Google, and there are people still searching for these specific things, which are the most profitable parts for Google, through artificial intelligence and are switching to it. But I mean generally, as of today. How do I see Google in artificial intelligence today? I see it as the one putting up the biggest fight against ChatGPT, the one that can continue to challenge it. The Gemini 2.5 model is very good. In fact, in LM Arena, which is where the rankings are, it was the model that became number one with the largest lead ever, the biggest overtaking with the largest distance and score so far. So, it’s a really good model, the latest from Gemini. And it also has something very good, which is the whole ecosystem; it’s integrated. And within Gemini, for example, when you search, it can do things with your Google Calendar, with Google Maps, for example. You’re traveling, you say, ‘Make me a route around here, okay?’ It makes a route. ‘Find me a place to go, a 3-hour route for Saturday morning, okay?’ It does it. You say, ‘Okay, put it on Google Maps.’ Okay, it does it. And then you say, ‘Okay, put it in my Google Calendar.’ And you have it in your Google Calendar, embedded in Google Maps. So, all this integration, Google has an advantage over ChatGPT. And I insist, the model today is possibly the best, although there are constant changes to see who overtakes whom, so it’s not something consistent. What’s the problem? That the top of mind today, even if it’s not the best model, is ChatGPT. So, people in their heads, when they want to ask something to an artificial intelligence, artificial intelligence is synonymous in people’s minds with ChatGPT. And that’s very difficult to change. It doesn’t matter if you’re slightly better. You have to be much better. You have to be five times better, absurdly better. And Google is better, it has the Deep Research searches, which for example in ChatGPT you need at least a paid plan to do deep research, which is better, but that gap has narrowed. Google is in a complicated situation, that’s why I say, ‘Okay, there are companies in my portfolio that have fallen, but the market sees greater risk, and I agree,’ and one of them is Alphabet. That’s why I haven’t increased; I still hold it in my portfolio, but whereas years ago it was my first, second, third, fourth position, now it might be the eighth, ninth position or so in my portfolio. It’s a smaller position due to this increased risk.”
Watch the exact part of the video where @Academiadeinversion talks about Alphabet Inc. (Google) here:
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