Ellerbroek: "So Many Strengths" in GOOGL A.I., AMZN "Most Underappreciated" Play

Core Insights - The discussion centers around the implications of Meta's potential acquisition of Google's Tensor Processing Units (TPUs) and its impact on the AI chip market, particularly concerning competitors like Nvidia and AMD [2][3][4][8]. Group 1: Meta and Google's Deal - Access to Google's AI accelerator chips is seen as beneficial for Meta, as it could provide a cost-effective alternative to Nvidia's chips, despite slightly lower performance [2][3]. - The deal poses a greater threat to AMD than to Nvidia, as AMD holds a weaker position in the market compared to Nvidia [3][7][8]. - Google's recent tripling of Nvidia chip purchases indicates its recognition of Nvidia's superior performance, yet the TPUs remain valuable for specific applications like inferencing [8]. Group 2: Market Dynamics and Competitors - Microsoft's stock has been negatively impacted by concerns regarding OpenAI's competitive position against Google's Gemini, which is reportedly outperforming OpenAI's latest model [10][12]. - Oracle's stock has also suffered due to its strong ties with OpenAI, leading to a significant decline in its stock price [13]. - Despite recent stock declines, Microsoft's overall market position and revenue growth remain strong, particularly in its Azure and software businesses [12][18]. Group 3: Alphabet's Performance - Alphabet's stock has surged approximately 92% over the last six months, nearing a $4 trillion market cap, making it a standout performer among major tech companies [14][15]. - The company's strengths in AI, including leading foundation models and unmatched consumer market distribution, have been increasingly recognized by the market [16][18]. - Alphabet's growth was previously underestimated due to regulatory challenges, but these have since been resolved, leading to a significant stock rally [18]. Group 4: Amazon's Position - Amazon is viewed as an underappreciated player in the AI and cloud computing space, similar to Alphabet's previous position before resolving legal issues [19][20]. - The company has developed its own internal chip program and leads in cloud computing for businesses and government [20][21]. - Amazon's retail business is experiencing rapid growth, supported by automation and robotics, positioning it as a strong AI winner with attractive valuations [21][22].