Conviction / Hyperscalers and Platforms
GOOGL
Alphabet Inc.
conviction · held at 9.0%
Alphabet's cloud business grew 82% last quarter and it now holds $514 billion of contracted work not yet delivered. The complication is that its spending pushed cash flow negative for the first time as a public company, and today several of its most senior research leaders announced they are leaving to start their own venture.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $363.39 |
| 30-day move | -1.0% |
| Position in 52-week range | 79 |
| From the 52-week high | -11.1% |
| Average daily volume | $12.4B |
| Weight in the book | 9.0% |
| Since last rebalance | +4.8% |
Why it is in the fund
Thesis
Gemini models, Vertex AI agents, and DeepMind research pipeline for next-gen agentic systems.
Standing judgment
About 11% off the high at roughly 28x forward, down about 4% today on the leadership news. The metered compute leg of the thesis is intact and arguably strengthening at an $514B backlog; the model leadership leg is now an open question rather than a settled advantage.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 80 | -4 | Cut because the leg that made Alphabet unique in this bucket, owning the model as well as the stack and the silicon, was complicated today by the departure of its chief scientist and three senior researchers alongside a slipped flagship model, while free cash flow went negative. | Q2 2026 reported 2026-07-22: revenue $119.8B (+24%), Google Cloud $24.8B (+82% y/y), cloud backlog $514B, up more than $50B quarter over quarter. Against that, Q2 capex was $44.9B, FY26 capex guidance raised to $195-205B from $180-190B, and free cash flow turned negative in the quarter. On 2026-08-0 |
| 2026-08-05 | 84 | flat | first v3 judgment (v2 score was uninformative, see L-001): Cloud is the rare case of hypergrowth and margin expansion happening together, which says the metered layer is being priced above its cost rather than bought with subsidy. | Q2 2026: total revenue $119.8B (+24%), operating income $40.8B at a 34% margin. Google Cloud $24.8B, +82% YoY, with segment operating income of $8.81B versus $2.83B a year ago, a margin near 35%. Cloud backlog $514B, up more than $50B sequentially, with just over half expected to convert within 24 m |
| 2026-08-05 | 84 | -12 | first v3 judgment (v2 score was uninformative, see L-001): Cloud is the rare case of hypergrowth and margin expansion happening together, which says the metered layer is being priced above its cost rather than bought with subsidy. | Q2 2026: total revenue $119.8B (+24%), operating income $40.8B at a 34% margin. Google Cloud $24.8B, +82% YoY, with segment operating income of $8.81B versus $2.83B a year ago, a margin near 35%. Cloud backlog $514B, up more than $50B sequentially, with just over half expected to convert within 24 m |
| 2026-07-31 | 96 | +2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-30 | 94 | -4 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-29 | 98 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-28 | 97 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-27 | 96 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-26 | 96 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-25 | 96 | -2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-24 | 98 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-23 | 97 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-22 | 98 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 98 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 98 | +6 | migrated from v2 (cause not recorded) | v2 `scores` row |