Alphabet is well positioned with AI applications, says GMO's Tom Hancock

Core Viewpoint - The current rebound in big tech stocks is influenced by long-term AI success rather than short-term government issues, presenting potential buying opportunities [2][4]. Group 1: Market Dynamics - The volatility in the market is expected to continue, with a fundamental risk being the potential drying up of funding if risk aversion increases [4]. - Companies with strong balance sheets and diversified businesses, such as Meta, Microsoft, and Alphabet, are well-positioned to weather short-term issues [5][6]. Group 2: Sector Preferences - Healthcare is highlighted as a preferred sector, particularly managed care names that may be undervalued due to ACA subsidy concerns [7]. - Big pharma stocks are also favored, with specific mention of Pfizer and the GLP-1 agreements indicating that regulatory rhetoric may be overstated [8]. Group 3: Investment Picks - Major holdings include Microsoft and Alphabet, with Alphabet noted for its unique position in the AI ecosystem, leveraging its own TPU chips and proprietary data [9][10]. - Alphabet's regulatory challenges appear to be diminishing, enhancing its attractiveness as an AI investment [11].