Key Points International stocks trade at 16.2-times earnings versus 28-times for U.S. stocks due to lower margins, slower growth, and structural challenges. The fund's 27% rally in 2025 reflects weakening dollar trends and China's reopening, not just valuation mean reversion. A 10% to 20% portfolio allocation makes sense for diversification, but this isn't a core holding replacement. 10 stocks we like better than Vanguard Total International Stock ETF › The Vanguard Total International Stock In ...

Core Viewpoint - Alphabet's stock presents a compelling investment opportunity due to a favorable court ruling, strong fundamentals, and a significant valuation gap compared to peers, suggesting potential for 50% upside in share price [1][8][16]. Group 1: Court Ruling and Market Reaction - A federal judge's ruling in September 2025 protected Google's Chrome from forced divestiture, leading to a 7% increase in shares during after-hours trading [3][2]. - The ruling alleviated regulatory concerns, enhancing investor confidence and revitalizing the investment case for Alphabet [2][17]. Group 2: Valuation and Comparison - Alphabet's price-to-earnings (P/E) ratio is 22, significantly lower than Amazon's 35 and Microsoft's 37, indicating a valuation gap that analysts find puzzling given Google's strong fundamentals [6][7]. - If Alphabet's valuation were to align with peers at a P/E of 35, the stock could exceed $320, representing approximately 50% upside from current levels [8]. Group 3: Growth Drivers - Google's cloud division is a key growth engine, with Q2 2025 revenue increasing by 31.7% year-on-year to $13.62 billion [11]. - Strategic partnerships, such as with NVIDIA, and a robust global infrastructure position Google Cloud as the third-largest provider in market share [12]. Group 4: Long-Term Outlook - Analysts maintain a bullish long-term outlook for Google, citing diversified revenue streams across digital advertising, cloud services, and AI as factors for resilience [13]. - Alphabet's consistent earnings and strategic acquisitions, including YouTube and Nest Labs, contribute to ongoing innovation and shareholder value [13]. Group 5: Regulatory Environment - While regulatory risks persist, analysts believe that the worst-case scenarios are already reflected in the current share price, making the risk manageable [14]. - The recent court ruling indicates a judicial understanding of the complexities involved in regulating integrated tech platforms, which may benefit Google in the future [15].