Google: Look Up At The Cloud (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

• The implications of generative AI on Google have taken center stage in discussions around the view of the stock.
• Amid all the AI hype, I think Google Cloud is passing by unnoticed as it carries a shower of positive surprises.
• Management's commentary has shifted from an investment-heavy focus to one of profitability and this is backed by strong improvements in Google Cloud's incremental EBIT margins.
• Broad-based price hikes in Google Workspace and Google Cloud Platform are strong catalysts for Google Cloud margins.
• Wall St consensus does not seem to be baking in these margin tailwinds as they are forecasting worse profitability going ahead. Therein lies my variant perception and the potential for alpha.

Read the full article here.