GOOGL - Baron Fund - Alphabet / Google: Unfairly In The GenAI Loser Bucket

2024-05-16 08:00:00 ET

Summary

• We initiated a new position in Alphabet (the parent company of Google) as we believe the risk-reward equation has become increasingly attractive.
• We believe the stock is put, unfairly in our view, in the GenAI loser bucket.
• While the advancements of GenAI represent a risk to Google, we believe investors underappreciate the company's positioning in AI and have assigned too high of a probability that the risk materializes.
• We continue to monitor the risk from GenAI disrupting search, particularly given Google's large market share today but believe the valuation is attractive and reflects too high of a probability for a bad outcome.

The following segment was excerpted from this fund letter.

Alphabet / Google ( GOOG , GOOGL )

During the first quarter, we initiated a new position in Alphabet ( the parent company of Google, the world's largest search and online advertising company) as we believe the risk-reward equation has become increasingly attractive for long-term investors with the stock put, unfairly in our view, in the GenAI loser bucket....

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