Google’s Secret Weapon Is Not The Only Thing I Like

(This story first appeared on Seeking Alpha (SA) today, and was written by Alessandro Pasetti, the founder of Hedging Beta.)


  • Pay attention to the traffic volumes mix and CPC into Q4.
  • Discipline in cost management also will make a difference.
  • Moonshots projects absorb a huge amount of capital but are necessary if Google is to preserve a competitive advantage over rivals.
  • Google has a secret weapon, too.

The stock of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), whose fortunes hinge on the performance of Google, its crown-jewel subsidiary, has surged over 40% since the turn of the year. That rise has come on the back of strong Q2 and Q3 results, which stunned the market in both occasions.

What’s next now?

A Balancing Act

Value hunters may well wonder whether Alphabet/Google remains a compelling equity investment right now. To find an answer, they’ll likely have to gauge their expectations for growth and profitability against the risk that such equity investment may bring based on a few variables, including rising trading multiples for cash flows and earnings.

Another element they should take into account is Google’s secret weapon, which affects the budgeting of certain capital-intensive moonshots projects.

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