Warren Buffett looks at market cap-to-GDP as one indicator for how frothy or cheap the markets may be.
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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
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
$SPX Source: Charlie Bilello