AI is widely expected to disrupt Google’s search business, and the authors concede that this risk is “mostly true.” However, they argue that this disruption doesn’t matter much to the long-term investment case. Even with growing competitive threats, Alphabet trades at a relatively modest P/E multiple of 19.1x as of May 2025—well below historical levels. This valuation suggests the market has already priced in significant pessimism, offering a margin of safety for investors who believe in the company’s broader capabilities.
The thesis focuses less on defending the future of search and more on identifying where the cash will come from next. Implicitly, the authors suggest that Google’s scale, engineering culture, and adjacent businesses—possibly including AI infrastructure—are capable of generating new streams of value. The message to investors is that Alphabet is being valued like a fading incumbent while still operating like a dominant innovator.
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