Billionaire Daniel Loeb sees value in Alphabet stock due to overlooked advantages in distribution/technology

From Nasdaq.: 2025-05-23 07:45:00

Billionaire Daniel Loeb of Third Point Management bought $453 million worth of Alphabet stock last quarter, despite the tech giant’s 13% YTD stock decline due to AI concerns. Loeb sees overlooked advantages in Alphabet’s distribution and technology, making it a buy at a bargain price with a forward P/E ratio of 17.

Loeb’s investment letter highlighted Alphabet’s distribution advantage as the default search engine on billions of devices, including Android and Apple. The company’s revenue-sharing deals with browsers like Chrome and Opera give it access to a vast market share for advertising, providing a significant monetization advantage over competitors.

Alphabet’s technology advantage includes leading AI research organizations like Google Brain and DeepMind, positioning the company to monetize AI capabilities like the Gemini model. Loeb believes AI-generated content will increase the value of Google Search as a trusted source, despite concerns about content quality and competition.

While there is a risk of Google search disruption, Loeb argues that Alphabet’s diverse revenue streams, including its cloud computing and Waymo robotaxi businesses, make it a solid AI winner. With a forward P/E ratio of 17, Alphabet’s stock is considered a buy opportunity for investors at current levels.

Considered a value investor, Daniel Loeb’s bullish stance on Alphabet stock highlights overlooked advantages in the company’s distribution and technology capabilities. Despite concerns about AI impact on search, Loeb sees Alphabet as a strong long-term investment with growth potential in various sectors, making it an attractive buy opportunity at its current valuation.



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