Tech's two outlooks

Google is the posterchild for Tech’s two outlooks.

Quickly earnings are good. AI is good. Things are good.

The problem if there is a monopoly anywhere it is going to get broken up. If there is a new tech anywhere the unimaginative executives all want to pile on board.

Profits are all at risk. Not just a downturn but eliminated monopolistic opportunities. That is new to big tech across just about every aspect of tech while Mcaps are all close to highs.

Google’s opportunities are dilemmas at best.

The industrials are better bets.

The claim de jour is how tech goes so goes the markets and the economy. That won’t hold up. It could but sharper minds see the risks for what they are.

?? Ad revenue may be impacted by recession, but for now, Google is one of the strongest moats. In fact their cloud revenues will grow faster than the recent past, thanks to AI and their traditional strength in data.


Go in and read the linked article. It is all under siege.

Satya Activision deal proved Khan can be beaten. Personally, I like her and I want the big corporations reined in. But, for now no body is scared of DoJ, they will pay a fine and move on. When in doubt look at Wall-Street.

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I agree on the search advertising front.

Everything else is up for grabs. Google has a history of being poor at doing anything else. Not search okay at Youtube and okay at cloud but then it really drifts off. Cloud is shifting away from Google. AI is hard. TikTok won’t happen, Google really flops with that stuff outside of YT.

The Ad stuff faces a different threat if Bing starts to operate separately again under Microsoft. That should not surprise you in the next two years. The government may push that now. Yeah Microsoft and Bing might be left in the lurch but it would not matter and over 10% of Google’s business in search would shift. Other smaller venues for search might be negotiable with DOJ. A settlement would be preferable for Google. Smelling that opportunity Google would jump. Later could be worse if they did not. Microsoft did such a move way back when. DOJ weakness is an opportunity.

Bing separately unviable.

IE was the dominant browser with 90% market share, today chrome has 78% market share. Android has 70% global market share, the list goes on… Here is google’s revenue… For a company with a history of poor at things… this is pretty impressive eh?

Microsoft can change that. Google is discussing moving towards more of a marketing force in search. Kind of humorous because that is what it has been for a long time now. Microsoft can do that. A store as search that is over 10% the size of Google’s search marketing reach is enviable. It is not unviable. Would be unviable for a year at most. Microsoft has a longer history than Google in more successful operations.

Andriod is a good call. Give you that. But Chinese competition could eat into that more.

2022 Microsoft $72 B versus Goog $65 B. Neck in neck.

DOJ and the competition are not toothless. DOJ has a bad time making it a good time to deal.

When Microsoft moved to a Google feed for Bing Apple was really beating Microsoft down. Apple has gone on to greater glory. Microsoft has gone on to greater glory. Microsoft really needs to revisit Bing. The marketing concept of search is better formed now.

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Give me some names, or at least some ideas in this space.

Not going to disagree that Google’s advertising and search business is at-risk with AI. Why search for an answer when a chat bot will just give you an answer? The question is if Google can pivot.

Microsoft looks to be in a position to profit from LLM’s and chat bots. Integration (at a monthly cost) to Office suites, to VS Code, are just two examples. Both hold promise. Adobe is profiting from generative AI. Intuit could do so as well. ServiceNow seems a good bet.

In short, I can see that some companies will profit immensely from AI. Google might not be one. But will industrials be a better investing bet? Let’s see some ticker symbols and discuss.

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Industrials are board category, from truckers to staffing companies to railroad to honeywel’s of the world.

I would go with XLI.

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AA has a huge upside right now as we reindustrialize.

IP as we get into more exporting our paper goods will be selling. Many plastic items may be replaced by paper products if paper can be used similar to a harder plastic.

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A quick Google came up with this free Fool article on this topic: