Alphabet shares tumble >7% on vibes.
Alphabet could be the next Eastman Kodak. Apple executive Eddy Cue revealed that the iPhone maker is exploring adding AI-powered search to its browser, after search activity in Safari declined for the first time ever in April. Apple is now considering alternatives to Google—including OpenAI, Perplexity, and Anthropic. "Today could mark a historic turning point in sentiment toward Alphabet," says Melius’s Reitzes. Source: HolgerZ, Bloomberg
Alphabet is worth $260 per share according to Barron's ! This is 75% higher than current price ‼️
See below the key takeaways from their article "What an Alphabet Breakup Would Mean for Shareholders 👉 https://lnkd.in/eBx4EZiE As mentioned above, they end up with a "breakup value / sum of the parts" of $260. Even if they take off 50% of the Search value, they end up with $182 per share, or 20% HIGHER than the current price! Here's how they calculated it 👇 ➡️ Google Search: 17x EBITDA for 2025 The valuation would be $1.76T or $143/share. ➡️ YouTube:" 22x EBITDA for 2025 The valuation would be $800B or $65/share. ➡️ Google Cloud: 16x EBITDA for 2025 The valuation would be $320 billion or $26/share. ➡️ Waymo: Valuing Waymo is more complex. Uber is valued at $150B, while Tesla exceeds $1T (as of October 2024) The valuation would be 325B or $26/share. $GOOGL Source: Patient Investor on X
S&P 500 operating profit margins expanded to 12.4% in Q1, their highest level since Q4 2021.
$SPX Source: Charlie Bilello
Foreigners are BUYING US stocks again
Source: Barchart
Japan is cheap...
Japan's forward P/E ratio is 13.5, or a 7.4% earnings yield. That is a 609bps premium to the 1.31% yield in 10-year Japanese government bonds. For context, the S&P 500 trades for 20.6 times forward earnings, for an earnings yield of 4.87%. That is just 0.56% over 10-yr T-Notes. Source: Jeff Weniger
Here's an intraday composite of the S&P 500's action on the last eight Fed Days
Bulls will be rooting for a reversal of this trend today. Source: Bespoke
So far very few US earnings downgrades...
Source: GS, Ronnie Stoeferle @RonStoeferle
The recent outperformance of european vs. US equities in context
Source: Michel A.Arouet, @Augur Infinity
