Premium content from Motley Fool Share Advisor UK
Our monthly Fire Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of growth-focused Fire recommendations, to help Fools build out their portfolios.
“Best Buys Now” Pick #1:
Alphabet (NASDAQ:GOOG)
- While Alphabet owns the dominant search company with greater than a 90% global market share, it has diverse portfolio of businesses, including Google Cloud, YouTube and even self-driving cars.
- It boasts impressive intangible assets, such as the tech expertise behind its search products, which provides a competitive advantage.
- The company has invested in AI not just to improve its search business, but also to power advertising through features such as enhanced targeting.
- Alphabet reported strong results for its first quarter, which saw revenues increase by 14% at constant currency, driven by 28% growth in Google Cloud. The operating margin grew by two percentage points to 34%
- Pleasingly the company appears to be speeding up its AI strategy – capital investments are expected to increase from $50bn to $75bn for the year, while it also cuts costs to offset the impact on profits.
- We shouldn’t forget the dominant position Alphabet holds in online advertising, the huge cash flow it pumps out quarter after quarter, and the opportunity to improve its products (including in the fast-growing cloud computing market) through its technological expertise (including in AI).
