Not All Who Wander Are Lost, Especially When They Find Alphabet's Profits!

A Company Rises: From Shadows to Sunshine

Hmph! It seems even in these modern times fortunes can turn faster than a Hobbit running from a Sackville Baggins. Alphabet or GOOGL as the younglings call it has seen its stock rise like a phoenix from the ashes or perhaps a Balrog from Moria—though hopefully with a less fiery outcome. A 1.7% gain! It might seem small but remember even the smallest person can change the course of the future. Or in this case the stock market.

AI: The New Ring of Power?

Artificial Intelligence eh? It reminds me of the One Ring—powerful alluring and capable of corrupting even the best of us. Alphabet is battling OpenAI and Anthropic in this arena rolling out GenAI products faster than you can say 'Mellon.' Morgan Stanley's Brian Nowak seems rather optimistic and who am I to argue with a man who knows his numbers? Unless of course he starts mumbling about precious things…

Numbers that Would Make a Dragon Proud

The numbers are in and by Eru Ilúvatar they are impressive! Earnings of $2.81 per share on a staggering $90.23 billion in revenue. Even Smaug might be envious. Revenue grew 12% year over year. It appears Alphabet has been quite busy crafting its own economic mithril. A fine mesh indeed stronger than steel yet light as a feather.

Tariffs: A Shadow of Mordor Over the Market?

Ah tariffs. Like the shadows of Mordor they loom over the global economy threatening to darken the landscape. Alphabet shares have dipped more than 14% this year battling volatility spurred by these trade wars. It seems President Trump's tariffs could make acquiring infrastructure for those AI data centers more difficult. One does not simply walk into Mordor… or easily build a data center apparently.

Loopholes and Legerdemain

Philipp Schindler speaks of loopholes those little cracks in the armor through which sneaky goblins—or in this case Chinese e commerce retailers—might slip through. Ending the de minimis trade exemption could create a 'slight headwind' for Alphabet's ads business in the Asia Pacific region. But fear not for even a wizard is never late nor is he early; he arrives precisely when he means to. And so I suspect will Alphabet.

Search AI and the Glimmer of Hope

Amidst the shadows there is still light. Alphabet's advertising and search business remain strong with $66.89 billion in revenue for its advertising unit. The AI Overviews tool now boasts 1.5 billion monthly users. Bank of America's Justin Post believes Wall Street underestimates the potential of this tool and cloud demand fueled by AI. Perhaps there is still hope for the world or at least for Alphabet's bottom line. Go back to the Shadow! Wait no that's not right... Keep innovating!