By coinnews 
00:00 Speaker A
I want to start with Alphabet here because this is the one that we are seeing move higher after the company came out with estimates uh with earnings that beat estimates by a pretty wide margin, revenue beating estimates as well. Um Gil, I want to start with you here because we did see these numbers very strong. The cloud revenue number may be a little bit light, but it doesn’t seem like investors are perturbed by that. What did you make of it?
00:31 Gil
Well, there’s two things to like. One is the search business is still growing. That’s that’s what we’re always bracing for here with Google. We know that everybody is now chat GPTing instead of googling, so there’s this expectation that we’re going to fall off a cliff. That may not happen until chat GPT and OpenAI starts selling ads. So for now, the digital advertising dollars are continuing to go to Google backward looking, that looks great. The other thing to really like is how much Google has cut costs, they beat on the bottom line by the most, and that’s the relief that you’re sensing here today. Even though the cloud, uh let let’s call it um was in line, which again is a deceleration from last quarter, which was a deceleration from the quarter after that. So what we like is search still growing, very profitable, uh even though cloud was just in line.
02:06 Speaker B
And Gil, what do you think about the regulatory overhang that that most of these companies still have to go through and the antitrust concerns? Is that is that something investors should still be concerned about?
02:23 Gil
Absolutely. The Department of Justice is hellbent on Google not having a monopoly going forward. So breaking up the three monopolies that it says Google already has in order to prevent Google from having a monopoly going forward with chat. So instead of Google dragging its feet, which is what it’s been doing so far, we think Google would be better off being proactive, spinning off these businesses, it would probably release value to shareholders, and uh but it doesn’t look like that’s what they’re doing. It looks like they’re going to fight back, drag this out, which is going to continue to be a drag on the business.
03:21 Speaker A
Angela, I want to bring you into this and and circle back around to search and uh chat GPT’s role in search here or you know, those AI summaries because as I mentioned earlier, the the company bringing up how many people are using those AI overviews, one and a half billion users. But as I said, I mean like I it just comes up when you Google. It’s not like you opted into the thing. So I wonder how much added value that is bringing and how much that is really sustaining growth in search.
04:11 Angela
Yeah, I know. So I think that’s a great question. And you know, I think it’s definitely going to get asked on the call and and I’m also going to want more clarity in terms of the AI monetization across Alphabet’s overall business, right? Whether it be AI overviews, which is you know, a clear um emphasis of this company here over the last couple of quarters, especially on the search side of things, or whether it be, you know, Gemini across its ecosystem and how they can monetize uh Gemini. But you know, our view as far as search is concerned is, and the numbers were, you know, really good in our view. You talking about growth of 10% on the top line basis, um for search as well as on YouTube. So it looks like at least in Q1, the advertising side of things looked fairly healthy. We’ll see if that can hold up through the rest of the year. My guess is you’re going to start seeing some um some deceleration across the advertising landscape as we progress through the year. Um so we’ll we’ll kind of see how that plays out. But ultimately, um you know, we do think they’re going to find ways to monetize this stuff. We want to see, you know, where AI overviews plays in terms of the role here, but um at the end of the day, I think, you know, search here looks pretty good.
06:23 Speaker B
So let me ask Angela. So a lot of these companies have reaffirmed their their capex. We heard from Alphabet. I guess we’ll know more at the call, but both Amazon and and uh and Alphabet seem to be very positive and really ignoring a lot of the effects of potential tariffs. Is that your view that that these companies are sort of just keeping their eye on the ball and uh you know, can they afford not to be more pessimistic about what’s happening or do you think they’re they’re still uh you know, doing the right thing?
07:16 Angela
I think the opportunity right now is too great for you to kind of take, you know, the the foot off the gas on the AI side of things. So I think Alphabet earlier this month did reiterate their 75 billion capex plan. I think you’re going to hear them reiterate it again here on the call. Um I don’t expect any change whatsoever in terms of some of these hyperscalers um for 2025. I think where the the issue is at hand is clearly as we go into 2026 and beyond, I think that’s really the risk for many analysts in the street out there. And literally, I I think, you know, what’s going to be important here is the digital ad side of things, right? If that slows or rolls over here over the next couple of quarters because of macro uncertainties, the street is going to get very concerned about the sustainability of capex going into 2026. And that’s where you get the fear of potential cuts, and that’s where it it potentially kind of rolls over into areas like semiconductors and provides downside on that side of things as well.