Daily Stock Pick for August 1, 2023

Most of the time, the stocks featured in this newsletter are “non-headline” names – stocks most investors would not hear about from the typical mainstream media sources.

Today’s daily stock pick is different…

Because you’ve 100% heard of this stock – AND it’s frequently spotlighted in the mainstream media.

So, why am I highlighting it today?

Simple, because there’s a good case for this stock still being undervalued…

Giving investors a chance to potentially see some solid gains from a stock that could join the “$2 trillion dollar” club very soon – with help from the generative AI boom.

Alphabet Inc. (GOOG)

Alphabet stock is up nearly 50% this year – sitting at a $1.68 trillion market cap – and is now about 12% away from surpassing its previous all-time high.

But based on its Q2 earnings report that it released last week, surpassing its previous all-time highs, and joining Microsoft, Amazon, and Apple in the $2 trillion club (something that would imply a 20% upside move) could happen within the next few months.

Alphabet beat consensus estimates on both top-line revenue and bottom-line earnings, with revenue exceeding expectations by nearly $2 billion and earnings exceeding expectations by over $1.2 billion.

YouTube continues to generate strong momentum for the company, with its short-form Shorts video garnering more engaged users compared to TikTok. Further, its integration of generative AI capabilities into its traditional search features appears to be successfully fending off competitors – cementing its dominance in the space.

Then there’s Google Cloud, which racked up $8 billion in revenue – a nearly 30% year-on-year increase. Yes, it’s still significantly behind Microsoft Azure and Amazon Web Services, but this is where the growth potential lies. 

Already, 70% of generative AI startups worth at least a billion used Google Cloud, thanks to its built-in offering of over 80 AI models which can be deployed in the cloud. And this is just the beginning – as the generative AI boom continues, Google looks to be a strong beneficiary.

All in all, I wouldn’t be surprised if Google hits the $2-trillion mark this year – handing out a nice 20% gain to those who get in now.

To your wealth,
Felix @ Ace of Investing