Why He's Bullish on Google After Earnings

**LJ Ducet** (0:00)
Can you tell me the last time a giant company reported $110 billion in profit just for the stock to go down the next day? If you answered last week, then congrats, you got it right. I'm talking about Google, who despite reporting in Astronomical Earnings, actually posted their first negative cashflow quarter in over 22 years. So what the hell is going on? What could they possibly be doing with all that money? And is this a good time to buy one of the biggest companies in history? What's up, everybody? It's LJ Ducet here and welcome to Milk Road AI, the daily AI show that's old enough to tell young people that I used to search things on Metacrawler and even Alta Vista. Today is July 31st, 2026, recording on July 30th. Every week, I sit down with Vincent, our AI analyst, for a deep dive into a specific company or sector. And today we're talking Google. They make so much money, but they reinvest every single penny into growing their capacity for the AI build out that's still full steam ahead, regardless of what the market would have you believe. Today, we'll dive into Alphabet, their earnings and why all that capex is going to pay off pretty soon. If you want to see Vincent's full portfolio and get his trade calls, which includes big wins like Bloom Energy earlier this year, you've got to sign up for Milk Road PRO. It's just a dollar for a seven-day trial at the link below. And a reminder that our podcast today is free and it wouldn't be possible with our partners that securitize the regulated rails for tokenization and Bitget Stocks 2 with real liquidity and real dividends. Keep an ear out later in the show for a message from them. Vincent, it's been a historic week. A lot has happened even since we did our roll-up episode two days ago.
And we've already done another episode with Kyle about the market that people have listened to by this point. So I feel like today we're just going to settle down to end the week and talk about one of the biggest companies in the world and what is going on with them. And maybe I feel like their earnings have been forgotten since last week, since everything that's happened.
But we're here to talk about Google. So tell me how you're feeling about Google. What's your thesis about them?

**Vincent** (1:57)
Yeah. So Google is a stock that's up 6% year to date when we're recording this. So I feel like it's a non-volatile name more or less that we can cover, which has a lot of upside, I think.
Why is that? It's because Alphabet is priced like their AI capex would destroy value in the future while the evidence, especially from this earnings last week, is suggesting that they're building a second earnings engine with their cloud and AI business.
That's the core thesis that makes me bullish on Google from here on out.

**LJ Ducet** (2:42)
So hold on, can you explain that first statement to me, that it's being priced like AI, CapEx is destroying its value? How does that work? Like wouldn't they increase value by spending money on more stuff?

**Vincent** (2:55)
Good, LG.

**LJ Ducet** (2:56)
Good.

**Vincent** (2:56)
You should invest in Google. You got the core message.
But actually, no, but actually the market hates CapEx at the moment.
Maybe a good analogy here is the Microsoft earnings of yesterday. They're up 10 percent because by actually artificially engineering that they're not increasing CapEx, the market is appreciating that. So because Google is just keep increasing their CapEx, spending more money on AI data centers, the market perceives this as more risk being taken on the balance sheet, and therefore the multiple that Google has compressed a lot. So shareholder value compressed. And that's basically the argument of why AI CapEx is destroying value.

**LJ Ducet** (3:50)
Got it. And you're telling me, and basically we're going to talk about today about how they are building something else. Like a totally separate line of revenue, and that the market is kind of just missing that, because it's worried about CapEx. It's just worried about it being a hyperscaler that's spending all this CapEx and doesn't see it, is kind of missing all this extra money that may be coming in already.

**Vincent** (4:17)
Yeah.
So what we're talking about today is a company that is taking the money it makes from the legacy kind of internet business and invests it into future AI business. That's kind of the core underlying thesis that everyone should keep in mind while we're going through this.

**LJ Ducet** (4:39)