How Do You Value Alphabet?
Digest
This podcast covers several key topics in technology and finance. Alphabet's Q[insert quarter] earnings are discussed, focusing on its cloud division's growth (despite a slight miss of analyst expectations) and its significant capital expenditures. The discussion emphasizes the importance of long-term growth and return on invested capital (ROIC) in evaluating tech giants. YouTube's advertising revenue and market dominance in connected TV are highlighted, showcasing its success in leveraging viewer preferences and algorithms. The podcast then shifts to valuing Alphabet beyond its core Google businesses, acknowledging the challenges of assessing long-term projects. Palantir Technologies is analyzed, focusing on its data analysis platform and its high stock valuation, cautioning investors about potential risks despite its growth. Finally, the podcast explores crisis public relations, including "black bag PR" and the "lead steer theory," illustrating how corporations might manipulate public discourse, particularly in the food industry, emphasizing the need for critical media consumption.
Outlines
Alphabet's Financial Performance & Cloud Computing
Alphabet's cloud revenue showed strong growth but slightly missed expectations. The discussion emphasizes long-term growth potential in the massive cloud market and the importance of ROIC over absolute CAPEX spending. YouTube's advertising revenue and market leadership in connected TV are also highlighted.
Valuing Tech Companies & Long-Term Investments
The podcast explores how to value Alphabet beyond its core businesses, including the challenges of assessing long-term projects and the importance of focusing on mature, revenue-generating assets. Palantir Technologies' high valuation is also discussed, highlighting the risks associated with investing in high-growth, but expensive, companies.
Crisis PR and Media Manipulation
The podcast delves into crisis public relations tactics, such as "black bag PR" and the "lead steer theory," illustrating how corporations might manipulate public discourse and the importance of critical media consumption. Examples from the food industry are used to highlight these manipulative techniques.
Keywords
Cloud Computing
The on-demand availability of computer system resources, especially data storage and computing power. A massive and growing market.
Return on Invested Capital (ROIC)
A financial metric measuring a company's profitability relative to its invested capital. A key indicator of effective capital use.
Capital Expenditure (CAPEX)
Spending by a company on fixed assets like property, plant, and equipment. Big Tech invests heavily in CAPEX for AI infrastructure.
Alphabet Inc.
Parent company of Google, YouTube, and other technology businesses.
Palantir Technologies
A data analytics company providing platforms for various industries.
YouTube
A video-sharing platform and a dominant player in connected TV advertising.
Crisis Public Relations
Managing public perception during a crisis, including potentially manipulative tactics.
Black Bag PR
Covert or manipulative tactics used in crisis PR to influence public opinion.
Lead Steer Theory
A crisis management strategy targeting a key media outlet to shape the narrative.
Ultra-Processed Foods
Foods undergoing extensive industrial processing, often high in added sugars, fats, and salt.
Q&A
How should long-term investors view Alphabet's cloud revenue shortfall?
The shortfall is minor in a massive, rapidly growing market. Focus should be on long-term growth and return on invested capital.
What is Palantir Technologies, and what are the risks associated with investing in its stock?
Palantir provides data analysis platforms. Its high stock valuation presents significant risk despite impressive growth.
How can listeners identify the influence of crisis PR in media reporting?
Look for missing information, unchallenged assumptions, and coordinated messaging. Consider who benefits from the narrative.
What is the "lead steer theory" in crisis PR?
A strategy to influence a major media outlet to set the narrative for subsequent reporting.
Show Notes
Google – all its apps, smartphones, and the cloud business – is responsible for 99% of Alphabet’s total revenue. But Alphabet is toiling away on quite a few moonshot projects. What if one of them works?
(00:14 ) David Meier and Mary Long break down earnings from Alphabet and Palantir. They also discuss:
- Why cloud computing isn’t going anywhere.
- YouTube’s secret sauce.
- What Palantir really does.
Then, (17:45 ), Ricky Mulvey talks with television writer and novelist Jordan Harper about how PR firms shape public opinion and how to spot their work when consuming the news.
Companies mentioned: GOOG, NFLX, PLTR
Host: Mary Long
Guests: David Meier, Ricky Mulvey, Jordan Harper
Engineer: Rick Engdahl
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