Google: Time To Start Scaling Out (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

• My earlier 'Strong Buy' stance on Google has played out, generating an alpha of +4.11% over the S&P 500. Now, I am changing my stance to a Neutral/Hold:
• I believe the earlier thesis about a rebound in Search advertising is already playing out and hence a bull thesis based on the same catalyst is less compelling.
• On the positive side, the revenue backlog particularly in the Cloud business is showing an acceleration after 10 consecutive quarters of decline.
• Higher data center costs continue to inhibit margin expansion in the Cloud segment.
• Given the mixed fundamental signals, I don't see a strong margin of safety in the valuations, or in the technical read of GOOGL vs. the S&P 500.

Read the full article here.