I do want to welcome in our next guest for a more broad look at the markets. Joining us this morning, Ted Thatcher, president of Bright Lake Wealth Management. Ted, great to have you with us as always.You know, love to get your thoughts on how we're starting off the week. I was hoping to say either a mixed picture or a lot of green on the board, but unfortunately I'm looking at the big board and seeing a lot of red. >> Absolutely, Marley.You know, I think the markets are just digesting more of what we saw l ...

Alphabet (GOOGL) stock climbed to a new high on Nov. 19 before closing the day about 3% higher. The jump came after Google unveiled its newest artificial intelligence (AI) model, Gemini 3, which the company says raises the bar for AI performance by delivering more concise, improved responses. The launch has renewed optimism among investors as AI has been a key driver of Alphabet’s growth. Notably, Alphabet is showing strong momentum across all of its core businesses, and AI is playing a key role in that p ...

Core Insights - Alphabet demonstrates strong growth in its search and cloud computing sectors, with significant upside potential remaining despite a 50% stock increase this year [1] Group 1: Financial Performance - Google Cloud revenue increased by 34% to $15.2 billion, with operating income rising 89% to $3.6 billion, indicating robust demand for AI services [2] - Google Search revenue grew nearly 15% to $56.6 billion, driven by AI Overviews and AI Mode enhancements [5] - Total quarterly revenue rose by 16% to $102.3 billion, with earnings per share climbing 46% year over year to $3.10, surpassing analyst expectations [8] Group 2: Strategic Investments - The company plans to increase capital expenditure to between $91 billion and $93 billion for data center capacity expansion, up from a previous estimate of $85 billion [3] - Alphabet's Waymo robotaxi service is expanding into new U.S. cities and international markets, indicating growth in autonomous vehicle services [7] Group 3: Market Position and Future Outlook - Alphabet's AI capabilities are enhancing its search business, alleviating concerns about AI's impact on revenue [10] - The Google Cloud segment is expected to continue its growth trajectory, supported by its Gemini large language model and custom tensor processing units [11] - The stock is attractively valued with a forward P/E ratio of around 27 times 2026 estimates, making it a long-term investment opportunity [12]

Core Insights - Alphabet achieved its first-ever $100 billion revenue quarter, driven by the integration of artificial intelligence (AI) across its business segments [1] - The company's stock surged over 7% in pre-market trading following the strong financial results [1] Financial Performance - Alphabet's total revenue rose 15% year-over-year to $56.6 billion in Q3, with AI-driven experiences enhancing user engagement and monetization [3] - Cloud revenue increased by 34% to $15.2 billion in Q3, supported by the rising adoption of enterprise AI tools [5] Business Segments - The search business is benefiting from increased consumer reliance on AI-powered experiences, contributing to overall revenue growth [2] - YouTube's ad revenue is also experiencing growth, further bolstering Alphabet's financial performance [2] - The cloud division's backlog grew 46% quarter-over-quarter to $155 billion, indicating strong future growth potential [2] AI Integration - New AI features like AI Overviews and AI Mode are enhancing search result quality and commercial intent, leading to deeper user interactions and new monetization pathways [4] - The demand for AI-led services is driving strong performance in the cloud segment, with a notable increase in new Google Cloud Platform (GCP) customers, up nearly 34% year-over-year [5] Subscription Growth - Alphabet's subscription business surpassed 300 million paid users, fueled by the popularity of Google One and YouTube Premium [3]

Core Insights - Alphabet's Q3 2025 revenue reached $102.346 billion, marking the first time quarterly revenue surpassed $100 billion, a 16% increase from $88.268 billion year-over-year, and a 15% increase when adjusted for constant currency [1][4] - Net profit for the quarter was $34.979 billion, up 33% from $26.301 billion in the same period last year [1][4] Financial Performance - Total revenue for Google Ads was $74.182 billion, a 13% increase from $65.854 billion year-over-year [4] - Google Cloud revenue grew by 34% to $15.157 billion, compared to $11.353 billion in the previous year [4] - Operating profit was $31.228 billion, a 9% increase from $28.521 billion year-over-year, with an operating margin of 30.5%, down 1.5 percentage points from the previous year [4] - Diluted earnings per share were $2.87, a 35% increase from $2.12 year-over-year [5] Stock Performance - Following the earnings report, Alphabet's stock price rose over 5% in after-hours trading [2] - The stock closed at $274.57, up 2.65% during regular trading, and further increased to $289.35 in after-hours trading, reflecting a 5.38% rise [3] Shareholder Returns - The board announced a quarterly cash dividend of $0.21 per share, payable on December 15, 2025, to shareholders of record as of December 8, 2025 [6] Executive Commentary - CEO Sundar Pichai highlighted the strong performance across all main business segments, emphasizing the rapid deployment of AI technologies and the growth in Google Cloud and subscription services [7][8]

Group 1: Financial Performance - YouTube ad revenue exceeded $10 billion for the first time in a single quarter, contributing to Alphabet's strong financial results [1] - Total revenue for Alphabet reached $102.34 billion, marking a 16% increase year-over-year and surpassing the $100 billion milestone for the first time [1] - Diluted earnings per share rose to $2.87 from $2.12, significantly exceeding Wall Street's expectations of $2.27 [1] Group 2: Industry Context - The tech sector continues to perform well, with major companies like Alphabet and Meta reporting strong earnings, while Apple and Amazon are set to report soon [2] - Heavy investments in AI have positively impacted stock prices across the tech industry, with Nvidia recently becoming the first $5 trillion company [2] Group 3: YouTube's Growth and Strategy - YouTube has maintained its position as the top streaming destination for over a year and a half, with nearly 10 million subscribers to its YouTube TV service, making it a leading pay-TV operator in the U.S. [3] - YouTube TV is currently negotiating with several network parents, including a looming deadline with Disney, as it seeks to leverage its subscriber base [3] - YouTube Premium has contributed to surpassing 300 million paid subscriptions, with Google One also being a significant factor [4] Group 4: Product Development - CEO Sundar Pichai highlighted the integration of Gemini, a large-language model, into Google search results, which has attracted over 650 million monthly active users [4]

Core Insights - Alphabet reported Q2 2025 revenue of $96.428 billion, a 14% increase year-over-year, and net profit of $28.196 billion, up 19% from the previous year [1] - The company is focusing on enhancing user experience through AI technologies and optimizing monetization models [2][3] - YouTube's subscription services are becoming increasingly important, with strong growth in offerings like YouTube TV and YouTube Music [3] Financial Performance - Revenue for Q2 2025 reached $96.428 billion, compared to $84.742 billion in Q2 2024, marking a 14% growth [1] - Net profit increased to $28.196 billion from $23.619 billion, reflecting a 19% rise [1] Business Strategy - The company is prioritizing the integration of AI technologies across its products, with a focus on enhancing natural user experiences [2][3] - A dual strategy of advertising and subscription services is being implemented for YouTube, aiming to balance both revenue streams [3] AI and Technology Development - The company is investing in AI capabilities, with a focus on improving user interaction and experience through products like Gemini [3][6] - There are ongoing efforts to enhance the efficiency of AI models and their application in internal processes [6][10] Market Outlook - The company anticipates continued growth in cloud services, despite current supply constraints, with expectations for capacity increases by the end of 2025 [4][16] - The advertising market outlook remains strong, with significant contributions from sectors like retail and financial services [14] Talent Acquisition and Retention - The company is actively investing in attracting and retaining top AI talent, emphasizing the importance of mission-driven work and collaboration opportunities [10][12] - Current talent retention rates are reported to be strong, despite some high-profile departures [10] Future Innovations - The company is exploring new hardware opportunities, such as smart glasses, to expand AI applications [7] - The dual-platform strategy of traditional search and Gemini is expected to cover a wide range of user needs, enhancing overall user experience [14]

Core Insights - The technology sector is highly profitable, with many companies generating reliable recurring revenues through subscriptions and strong demand for products [1] Company Summaries Apple - Apple generated $167 billion in sales from its products and $53 billion from subscription services in the first half of the year [3] - The company produced $24 billion in operating cash flow in Q2 and returned $29 billion to shareholders through dividends and share repurchases [4] - Apple has over $132 billion in cash and equivalents, recently increasing its dividend by 4% and launching a $100 billion share repurchase program [4] Alphabet - Alphabet generated over $90 billion in revenue in Q1 from online advertising, subscriptions, and cloud services [5] - The company produced nearly $19 billion in free cash flow in Q1 and $75 billion over the last 12 months, returning $1.2 billion in dividends and repurchasing over $15 billion in stock [6] - Alphabet's cash and equivalents rose to nearly $134 billion, with a recent 5% dividend increase and a $70 billion share repurchase program [6] Microsoft - Microsoft reported over $70 billion in revenue in Q3 of fiscal 2025 from various services including Azure and AI [8] - The company generated nearly $94 billion in net cash from operations in the first nine months of fiscal 2025, returning about $18 billion in dividends and $14 billion in stock repurchases [9] - Microsoft ended the period with almost $80 billion in cash and equivalents, having increased its dividend by 10% and approved a $60 billion share repurchase program [9] Meta Platforms - Meta generated over $41 billion in advertising revenue in Q1, along with additional revenue from its apps and Reality Labs [10] - The company produced more than $10 billion in free cash flow and returned almost $15 billion to shareholders through stock repurchases and dividends [11] - Meta's cash balance stood at $70 billion, indicating strong financial health [11] Nvidia - Nvidia generated $44.1 billion in revenue in Q1, a 69% increase year-over-year, driven by a 73% surge in sales to data center customers [12] - The company produced over $27 billion in cash flow from operations, a 79% increase from the previous year, returning $14.3 billion to shareholders [13] - Nvidia's cash balance increased to $53.7 billion, with a 150% dividend hike last year and a $50 billion increase in its stock repurchase program [13] Industry Overview - Large technology companies are generating substantial recurring revenues from subscriptions and advertising, allowing them to return significant cash to shareholders through growing dividends and share repurchase programs [14]

Core Viewpoint - Google is entering a new phase of sustainable high-profit growth by migrating AI computing power from remote data centers to its own edge devices, leveraging its dominance in search, digital advertising, and cloud services [1][2]. Group 1: AI and Technology Integration - The integration of Gemini AI technology into a vertically integrated ecosystem, including custom Tensor Processing Units (TPUs), software environments, and autonomous devices, is transforming every machine into a revenue-generating channel [1]. - The Gemini Robotics SDK allows developers to test and deploy locally, breaking the previous cycle of dependency on costly public cloud services, thus democratizing access to AI technology [2]. - The shift of intelligence from remote servers to edge devices enables low-latency, high-profit revenue nodes, with Gemini Robotics On-Device capable of operating offline with near-cloud performance [1][2]. Group 2: Financial Performance - Google Cloud revenue grew by 28% to $12.3 billion, with operating profit reaching $4.6 billion, nearly double from the previous year, largely due to high-margin AI workloads [5]. - Capital expenditures increased to $17.2 billion in the same period, expected to reach $75 billion for the year, while net income rose by 46% to $34.5 billion, indicating a strong commitment to AI investments [5]. - The services segment, including YouTube and Google One, contributed $77.3 billion, growing by 10%, with YouTube Premium and Google One increasing by 19%, providing a buffer for the company's ambitious plans [5]. Group 3: Market Position and Competitive Landscape - Google is leveraging its TPU technology, which has shown significant performance improvements, to gain an edge over competitors who are increasingly reliant on Google's technology [4]. - The company is expected to maintain a competitive advantage as it integrates AI into various sectors, including defense and healthcare, while managing regulatory scrutiny [7][10]. - Despite the challenges, Google's robust balance sheet and ongoing investments in AI and robotics are expected to create a high-margin, defensive growth model that the market has yet to fully appreciate [18]. Group 4: User Engagement and Adoption - Gemini's usage metrics show 35 million daily active users, which is modest compared to competitors like ChatGPT, highlighting the need for a growing developer community to enhance the platform's appeal [11]. - The integration of Gemini into consumer touchpoints is expected to enhance model performance through user feedback, creating a symbiotic relationship that fuels further development [6]. Group 5: Valuation and Future Outlook - The stock's price-to-earnings ratio is currently at 20.21, with an intrinsic value model suggesting a price closer to $132, indicating a potential downside of about 25% from the current price of $178 [13][15]. - Analysts expect earnings growth to drive a decline in the P/E ratio from 22.17 in 2024 to 13.16 by 2028, reflecting strong profit engines but also a potential slowdown in growth [15]. - Despite mixed signals in cash flow growth, the company's strong balance sheet and ongoing investments in AI and robotics position it well for future cash flow generation [18].

Group 1 - The global in-app purchase revenue for non-gaming apps is projected to grow by $13.7 billion to $69.2 billion in 2024, with AI apps contributing $1.2 billion and experiencing a 179% year-over-year growth [2][5][40] - AI product downloads reached 1.49 billion in 2024, marking a 91.8% increase, while revenue from these products hit $1.2 billion, up 179.1% year-over-year [5][40] - The main AI app categories remain ChatBot and Art Generator, with a focus on user demographics [7][12] Group 2 - In the ChatBot category, ChatGPT dominates with 23% of downloads and around 40% of revenue, while shell products continue to perform well despite competition from major companies like Google and Microsoft [13][15][21] - The user demographic for ChatBot products is primarily male, aged 25-34, with a growing female user base [21][22] - AI companion products like C.ai attract a younger female audience, with 71.8% of its users being female [22][30] Group 3 - The productivity tools segment saw a 34.9% increase in revenue, reaching $14.3 billion, despite a slight decline in overall downloads [40][44] - Major players in the productivity tools market include Google One, ChatGPT, CapCut, and Canva, all of which have integrated AI features [41][42] - The average revenue per user (ARPU) for productivity tools has increased across various markets, with Australia leading the way [44][45]