Kevin Hanks live at the CBOE for our pre-bell playbook. We uh don't get some of our Bureau of Labor Statistics jobs reports, but we do get ADP, private uh employment. Let's talk a little bit about that.Good morning, Kevin Hanks. >> Good morning, Nicole. Yeah, we got ADP private payrolls out this morning.A number that was slightly less than expected. 22,000 private payrolls. They were looking for something in the mid40s.Uh breaking down the numbers, if you look at education and health services gained 74,000 ...

Core Viewpoint - Britain's competition regulator has proposed measures aimed at enhancing Google search services, focusing on ensuring publishers receive fairer compensation for their content [1] Group 1: Regulatory Measures - The proposed measures include a package designed to improve the search services provided by Google in the UK [1] - The regulator emphasizes the need for a fairer deal for publishers regarding how their content is utilized by Google [1]

Core Viewpoint - Alphabet was the best performer among the "Magnificent Seven" stocks in 2025, with a stock increase of over 65%, significantly outperforming Nvidia, which gained nearly 39% [1] Group 1: AI Impact and Investor Perception - The primary reason for Alphabet's outperformance was its ability to shift investor perceptions regarding the impact of artificial intelligence (AI) on its business [2] - The Gemini model received widespread acclaim as a leading large language model (LLM), enhancing investor confidence in Alphabet's AI capabilities [2] Group 2: Revenue Growth and Market Position - Google search revenue accelerated due to AI-powered features like Lens and Circle to Search, and a favorable ruling in its antitrust trial allowed Alphabet to maintain its distribution advantage [3] - The ruling confirmed Alphabet's ability to keep its Chrome browser and Android operating system, further solidifying its position as a primary gateway to the internet [3] Group 3: Custom AI Chips and Cost Advantage - Alphabet's tensor processing units (TPUs) have been recognized for their significance, providing a structural cost advantage in LLM training and inference [4] - The company developed TPUs over a decade ago, giving it a competitive edge in the custom AI chip market, allowing it to avoid the "Nvidia tax" [4] Group 4: Cloud Computing and Future Growth - Google Cloud emerged as a significant revenue driver in 2025, with customers utilizing TPUs for their AI workloads [6] - A notable $21 billion TPU order from Anthropic through Alphabet's partner Broadcom indicates strong demand, with projections suggesting that deploying 500,000 TPUs could increase Alphabet's revenue by approximately $13 billion [6]

Group 1 - Currently, no stocks have a market cap of $5 trillion or greater, with Nvidia valued at $4.3 trillion, Apple at $4 trillion, Alphabet at $3.7 trillion, and Microsoft at $3.5 trillion [1] - Nvidia is expected to cross the $5 trillion valuation threshold by 2026 due to its rapid growth driven by demand for its GPU technology and artificial intelligence computing power [4][5] - Nvidia's CEO stated that the company is "sold out" of cloud GPUs, indicating strong demand that supports high prices and profit margins, with projected growth rates of 63% in fiscal year 2026 and 48% in fiscal year 2027 [5] Group 2 - Alphabet has faced challenges in the AI sector but has now become a leading provider of generative AI, with its core Google search business remaining intact amid monopoly concerns [7] - Alphabet's future outlook has improved significantly, suggesting potential for valuation increases and strong growth that could also lead to crossing the $5 trillion mark [6][8]

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Core Insights - Sundar Pichai discussed the rapid advancement of AI technology, predicting that within the next 12 months, AI will be capable of performing complex tasks and acting on behalf of users, which he finds particularly interesting [1][7] - Pichai suggested that AI could potentially replace the role of a CEO, stating that the functions of a CEO might be among the easier tasks for AI to perform in the future [2][7] - He acknowledged that while AI will eliminate some jobs, it will also evolve and transition others, necessitating adaptation from the workforce [2][7] AI Development and Impact - Pichai emphasized that there is still work to be done to unlock the full capabilities of AI, but the journey of development is exciting [2][7] - He noted that AI will unlock powerful applications for everyday users, such as aiding in decision-making processes regarding investments or medical treatments [7] - Pichai expressed that no company, including Google, will be immune to the impacts of the AI bubble burst, indicating a potential for overshooting in investment cycles similar to the internet boom [5][7] Company Preparedness - Google is prepared to navigate the turbulence of the AI market due to its comprehensive technology stack [5][7] - Pichai warned that AI models are prone to errors, advising users not to rely solely on them, which underscores the importance of traditional search methods [6][8]

Model Performance & Benchmarks - Gemini 3 surpasses previous Frontier models in benchmarks, demonstrating significant advancements in AI capabilities [1] - Gemini 3 achieves 458% with code execution and search on Humanity's last exam, compared to Gemini 25% Pro at 21%, Cloud Sonnet 45% at 13%, and GBT 51% at 265% [2] - On the Vending Bench benchmark, Gemini 3's net worth reached $547816%, significantly outperforming Cloud Sonnet 45% at $3800 [4] - Gemini 3 Deep Think scores 41% on Humanity's Last Exam, compared to Gemini 3 Pro at 375%, Claude Sonnet 45% at 13%, GPT5 Pro at 30%, and GPT 51% at 265% [9][10] - Gemini 3 Deepthink achieves 451% on Arc AGI2 visual reasoning puzzles, a 10x improvement over Gemini 25% Pro [12] Enterprise Applications & Features - Boxcom's benchmark shows a 22-point performance increase for Gemini 3 Pro versus Gemini 25% Pro, with scores of 85% and 63% respectively [6] - Industry subsets in Boxcom's benchmark show significant performance jumps: Healthcare and Life Sciences (45% to 94%), Media and Entertainment (47% to 92%), and Financial Services (51% to 60%) [6] - Gemini 3 excels in complex multi-step reasoning and task automation, as highlighted by Box's new benchmark [7] - Gemini 3 supports multiple modalities, including text, images, video, audio, and code, with a unique focus on video understanding [12] - Gemini 3 can analyze YouTube videos frame by frame, understanding the content in detail [13] Google Integration & New Products - Gemini 3 is integrated into Google Search, dynamically generating user interfaces based on user queries [17] - Google launched anti-gravity, a VS Code fork coding platform that supports Gemini models and other models like GPTOSS and Anthropic's Sonnet [20] - The updated Gemini app features Gemini Agent capability, enabling the AI to complete real tasks on the user's behalf and create dynamic UIs [24] Model Architecture & Specifications - Gemini 3 is a brand new foundation model, not a modification of a prior model [27] - The model accepts text, images, audio, and video files as inputs, with a token context window of up to 1 million and output tokens of 64000 [28] - Gemini 3 is a sparse mixture of experts model built on Google's custom TPU architecture for both pre-training and inference [28]

Market Expansion - Polymarket odds will be integrated into Google search and finance [1] - This integration provides baked-in distribution with over 8.5 million searches per day [1] - Polymarket aims to be ubiquitous, powered by Polygon [1] Partnership - Polymarket is partnering with Google to integrate its odds [1]

Core Insights - Alphabet is positioned as a leading AI stock for the upcoming year and beyond, with widespread daily usage of its products [2] - The company's primary business remains Google search, which is expected to continue being its most significant revenue source [3] Market Position - Alphabet dominates the search engine market with over 70% market share in both the Chrome browser and Android operating system, making it the default search engine for most users [4] - A revenue-sharing agreement with Apple further extends Alphabet's reach, excluding China where it does not operate [4] AI Integration - Alphabet is enhancing its search capabilities with its Gemini large language models, introducing multimodal AI features like Lens and Circle, which are increasing user queries [5] - The company is rolling out AI Mode, allowing seamless switching between traditional search and AI chatbots, and its Gemini app is gaining popularity with tools like "Nano Banana" [5] Competitive Advantage - Alphabet possesses a unique data advantage, with decades of behavioral data, extensive YouTube video libraries, and a large-scale ad network that supports diverse advertising campaigns [6] - This competitive edge contributes to a wide moat that protects Alphabet's market position in both search and AI [6] Growth Potential - The company is experiencing strong growth in cloud computing and is making strategic investments in emerging technologies [7] - Current stock valuations are considered attractive, indicating potential for future investment [7]