Good
@Dan1192：Today I will be closely watching $Alphabet(GOOGL)$ and $Amazon.com(AMZN)$ . For Amazon, it's simply because they are reporting their earnings today. On Goog, it is interesting to see if there will be a fast rebound. After all, it was a good earnings report. I think in the next few weeks, Google have a good chance of recovering from the 8.5% drop. On the slightly longer time frame of 3 months, I remain Bullish and here are my considerations. 1. Cloud earning miss The recent 8.5% stock drop following Google Cloud's Q4 revenue miss ($11.96B vs. $12.2B expected) appears to be an overreaction. While concerning, it's important to note that: - Cloud revenue still grew 30% year-over-year, indicating strong momentum (Microsoft cloud grew 21% y-o-y in comparison) - Google Cloud maintains its position as the third-largest cloud provider - The AI infrastructure spending aims to address growing customer demand for AI compute 2. $75B AI Capital Spending Google's massive AI investment plan has both short-term and long-term implications: - Short-term pressure on margins due to higher-than-expected capex - Long-term positioning to support Gemini models and cloud services - CEO Sundar Pichai emphasizes these investments will "directly drive revenue". Personally, you may have noticed how Gemini is giving responses in Google searches now. I think this is really powerful, and will be one of the key component to maintain their lead as the search engine provider. 3. Investors Sentiment - Technical indicators suggest a potential 19.61% rise over 3 months to the $212.47-$222.36 range - Median analyst price target of $210 implies a 9% upside - The stock maintains a reasonable P/E ratio of 25. - Personally I am aiming for a $200 price target before the next earnings report. 4. Chinese AI Threat The emergence of Chinese AI competitors has introduced a new dynamic: - DeepSeek's launch caused a significant market reaction, with the Nasdaq dropping 3.1% and the S&P 500 falling 1.5%. However, I believe this Volatility is largely brought by the Trump administration. - Chinese firms are advancing rapidly in AI research and application, challenging U.S. dominance. At the same time, competition drives innovation and Google’s reaction to innovation is one of the quickest, if not the quickest. - The U.S. efforts to contain China's AI progress through export controls have had limited success, but I think we will see more concerted efforts on the AI rivalry looking at how the leaders of Google, Meta, Amazon, Oracle, Tesla are all at Trump's inauguration. ... my 3-Month outlook... I ran a few scenario tests and the most likely scenario sees a moderate recovery to the $200-$210 range as markets digest cloud growth concerns and recognize the strategic importance of AI infrastructure investments. However, volatility will persist due to: 1. Uncertainty around Q1 2025 capex results ($16B-$18B planned) 2. Ongoing U.S.-China trade tensions and potential antitrust probes 3. The evolving competitive landscape with domestic and Chinese AI firms Happy Lunar New Year! GONG XI FA CAI! Huat ah! @CaptainTiger @TigerStars
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