Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More

Core Viewpoint - Seth Klarman, a prominent value investor, has identified Alphabet (GOOG) as the only attractive investment among the "Magnificent Seven" stocks, despite the overall high valuations of the group [3][5][15] Group Analysis - Klarman's investment strategy remains flexible, allowing for investments in stocks that may not fit traditional value metrics, including growth stocks [2] - The "Magnificent Seven" stocks have generally performed well, but many are considered expensive based on traditional valuation standards, with four stocks, including Tesla, having forward P/E ratios above 30 [5][6] - Alphabet stands out as it trades below the S&P 500 average valuation, despite its strong growth potential [7][15] Alphabet's Valuation and Risks - Alphabet faces significant regulatory risks, including lawsuits that could impact its market position in web search and digital advertising [10][9] - The rise of AI chatbots poses a competitive threat, but data suggests Alphabet is not losing significant market share, and its AI features have enhanced user engagement [11][12] - The Google Cloud platform has shown strong demand, with a 28% year-over-year revenue increase and improved operating margins, indicating robust growth potential [13] Growth Drivers - Alphabet's "Other Bets," particularly Waymo, are progressing well, with significant advancements in the robotaxi business, completing 250,000 paid trips weekly [14] - The company is expected to achieve double-digit revenue growth in the foreseeable future, supported by the scaling of Google Cloud and Waymo [15]