Alphabet: 3 Reasons To Sell (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Google's advertising segment faces a weak growth outlook in FY25 as it comes off an election year, with some growth tailwinds cooling down.
• Despite being smaller in scale than Microsoft Azure, Google Cloud's revenue growth is slowing down to that of Azure. This raises concerns of potential market share pressures.
• I expect higher depreciation expenses from capex investments to pressure EBIT margins below 30% in FY25.
• Valuations are near historical fair value levels, and GOOGL vs. S&P 500 technicals show a strong rejection off monthly resistance after the Q4 earnings release.
• Google is seeing good traction in AI-enhanced search features and is monetizing that at the same rate as its existing Search business. This makes it a source of upside risk to my bearish thesis.

Read the full article here.