You're Being Lied To About Google Stock

There's always a lot of confusion in the stock market. Investors like you and me are always trying to figure out what narrative is true and which one is false amongst all the information and opinions shared about every company that we invest in. If you take an average company like Google or Tesla, there's going to be a thousand opinions on it, a thousand stories. And we know that the best investors are the ones that are able to dissect the truth, what's actually going on with a company, and then making sound investments based off of the truth. But what I believe is happening today after looking at social media, after looking at the market over the past couple of weeks as we wrap up the second week of this earnings, is that I believe it's never been more difficult for investors to find the truth, to actually understand what's going on with the company. And that is because of social media. We're in a situation now where there is so much slop, so many false stories, so many blatant lies and mistruths, misinformation shared every single day that it is almost impossible to filter and sift through all of it. Right now, many accounts online are sharing factually incorrect information, things that are provably wrong. When they're presented with the truth, when their lies are completely disproven to their face, they don't offer any type of apology or correction. they simply double down, insisting that they're not wrong despite the facts in front of them. This is the attitude and behavior of literally hundreds of accounts that influence investors every single day. And it's becoming more difficult, I believe, for investors to maintain a long-term perspective. So, in this episode, I believe it's necessary to not only address these companies earnings reports. So, we'll be looking at ASML and Netflix and Google in the episode and what these companies are doing. But not only that, I want to address some of the false narratives that have been shared around these companies and some of the tactics that people are using to try to manipulate other investors with halftruths or falsehoods. We'll be doing a little bit of separating fact from fiction. So, we have all of that to get into, plus we have two fail of the weeks today. We're going to be highlighting President Trump. It's finally his time. He made it into the fail of the week. and we also have trial lawyers and we'll be going into why both of them are the fail of the week in this episode. Now, let's go ahead and jump right in. Before we get into the earnings reports themselves, I think it's important to address why I believe many investors are making mistakes in today's market. And a lot of it comes down to what investors are focusing on. For example, I've always seen the data that investors are better at buying homes than they are stocks. On average, when somebody buys a home and makes that investment, which it can be viewed as an investment. You're buying a piece of real estate, you're buying land, you're buying property. That's an investment. People overall make money on homes. They make good money on homes. Homes have been some of the most predictably good returning investments that individuals have made throughout history. In fact, Peter Lynch said that a home is typically a person's best investment. Now, that may not be too surprising at first, but consider that for a moment. Investors almost always make money on homes, but they frequently lose money on stocks. And there are reasons that contribute to that. One of them is that people naturally do better research when buying a home. When you're buying a home, you consider it a big purchase. You go inside the house. You inspect the floorboards. You look at the countertops. You peek into the attic and make sure everything looks good. You look for cracks in the concrete of the foundation. You look at the home and you also look at the area. You look at what schools they have nearby. What's the crime rate like? Which parks are they next to? What are the neighbors like? What is the the whole neighborhood like? When people do research on a home, they do very thorough due diligence on the home itself. Now, investors do some level of due diligence on a stock, but it's not nearly to the same extent they do on buying a home. Many investors will look at a stock for 15 minutes and decide to throw some money into it. So, the level of research is not the same. Another big aspect is the time horizon. When investors buy a stock, they like to pretend like they're buying it for the long term. That's what most investors say when they're entering into a position. Well, I'm going to buy Google for 10 years. I'm going to hold on to it and not worry about the short term. But then that Google investor will most likely be looking at the stock on a day-to-day basis. Right after buying it, they'll see if it's up or down the very next day. But I don't see a lot of homeowners doing the same thing. It's rare that someone moves into their house and the first thing that they do the next day is check Zillow and then check it the next day after that and the next day after that. It'd be even more rare if they checked it more times throughout the day, multiple times throughout the day. There's not many homeowners who their morning routine involves checking their home value. That's just not something real estate investors do. Therefore, they ignore the short-term fluctuations of the real estate market. They focus on the long term. And in most cases, it's proven that homeowners live in their homes for much longer than expected. Many of them are in their homes for 5 to 10 plus years. When you hold an asset that naturally goes up in value, like homes do and stocks do, for 5 to 10 years, in almost every case, you're going to have a positive return. You're going to make money on it. In stocks, the problem is many investors buy in with a long-term perspective and then within minutes they're checking the short-term price fluctuations, the short-term movements of the stock, the sentiment, the valuation of it, all within a couple of months of buying. So, you can see how it would be easy to assume that investors in stocks would have better outcomes if they treated it more like a real estate investment. They did proper due diligence, very thorough due diligence of the asset they're buying. And then once they bought it, they didn't worry about the short-term price fluctuations and they held for truly multiple years. Investors would have superior returns over a long period of time. But even so, I believe there's one other aspect that makes home ownership and investing in real estate easier than investing in stocks. And that is online commentary. When someone buys a home and moves into it, most of the commentary from friends and family is celebration. It's positive. People say, "We love your house. It's great. we want to come over and have dinner and and have fun times here, fun experiences. Even if they don't really love the house, most people are going to congratulate you on it anyway. Most of the commentary about owning a home is relatively positive. It's not impossible, but it's very unlikely for someone to want to scare you out of home ownership once you've already bought a home and you're settled in. With stocks, it's entirely different. You can have held a stock for years, but yet still read comments online about that same stock that you've held and owned for years that may persuade you to become concerned about it. That may persuade you to take a different opinion on it, to focus on the short term or to get scared out of the position. And that is something that I see as a growing problem. And the amount of people doing this, becoming bearish on stocks, celebrating when they go down in the short term and changing their history, altering the truth, giving different stories that are completely fictitious about a stock, I believe is at an all-time high. And I want to highlight just a couple examples here. Take take him for example. Two days ago, he posted this post right here. Google is a secular short. Now, in investing, secular means long-term, not based off of short-term price uh fluctuations or momentum. It's not a short-term thing. Secular means long-term multiple years. So, in essence, take him is saying definitively that Google is a multi-year short. You can even look at the definition of the word if you want. The word secular when used in stocks means that it lasts for many years. Now, that's fine to say that Google's a secular short and make your case for it, but the problem is that take him posted only two days later saying that you can buy Google when they release Gemini 4 in a couple months and the riskreward will be a lot better. So, he's calling it a multi-year short in one post and then 2 days later saying that you can buy Google in a couple months with a great setup. It's as if words don't even have meaning in the online sphere. Like, they just don't mean anything. You can say anything and then you can change it the next day and nobody really cares. And then we move on to, I believe, the most egregious examples. This isn't just erasing posts. This isn't changing the meaning of words or completely going against what you just said a couple days ago. This is the example of outright fabrication and misinformation. This is shared by an account called Max Anderson. And this wasn't some small post. This is something that received a lot of attention. For example, this post has been viewed nearly a million times. It's received 5,700 likes, been bookmarked thousands of times, retweeted hundreds of times. This is a very trending, popular post across social media, and in it, it details a complaint against Google. The only problem is that much of the complaint is provably wrong or grossly misrepresented. We can look at just the start. There are things that are egregiously wrong just with the very beginning of this post. For example, this person offers some credibility. They try to say that they know what they're talking about because they spend $500,000 a month on Google Ads and they've done so for years. So basically, they're spending a little bit of money on Google Ads. And yes, this is a little bit of money in the grand scheme of how much Google makes. It's a very small amount. So 500,000 a month gives them credibility. And this is what they're stating. This revenue growth in search is artificial and extremely unhealthy for Google's business long term. Search volumes are declining as legacy search is being increasingly cannibalized by non-monetized LLM queries. Here's Sundar Pachai talking about this on the earnings report. >> As a big football fan, I was particularly excited to see search usage hit an all-time high during the World Cup this year. This really highlights how much people turn to Google in moments that matter. >> Sonor Pachai points out that search volume, the number of queries, hit an all-time high this year and that the single biggest search day in Google's history was during the World Cup. He continues on, >> "Our AI powered features are driving increased search usage. Since expanding AI mode globally last October, we've surpassed 1 billion monthly active users. And just like AI overviews, AI mode is driving an incremental increase in search queries overall. And we are now sending billions of clicks to websites every week through AI features in search. AI mode is driving more searches, not fewer. Queries are not going down, they're going up. They just did a record high searches last month. Google's search revenue was up 17%. The revenue also backs up his statements. This first statement on this post is provably wrong. By the earnings reports of Google, by the CEO's statements himself, this is incorrect. Yet, a million people are reading this. Thousands are liking it. Many of them are bookmarking it as though it's some type of secret information about Google. The rest of this is also laced with factually incorrect or grossly misleading information. And when all of this was pointed out and corrected by someone else referencing all the actual data, did Max Anderson say, "You know what? I was wrong on this. I got it wrong and now I I'm I've been corrected." Of course not. He said the person correcting him was wrong on every point. And he says that I'll take my own data on millions of dollars of recent ad spend, which I manage personally over Google's public statements any day. So he trusts his own intuition, his own thoughts about the company based on what he spends on it more than Google's public statements. It seems that conspiracy theories have hit the stock market. Sundar Pachchai is just lying about these numbers. He's just making them up. The revenue is made up. Everything's just made up. Now, if that's the case, then we should eventually see the big scam unfold. we'll see Google collapse as a big Ponzi scheme because a CEO can't just publicly make up figures about the company, especially one that's as heavily audited as as Google. But this is essentially what people are saying and it's being believed now in greater numbers than ever. So if it's not true that Google is struggling or it's deceptively growing its search, then what is the truth here? What's actually going on with Google? Well, what's going on with Google is that the intrinsic value of the company continues to climb. Google today is worth more as an enterprise. It's more valuable today than it was a month ago. This earnings report was incredibly strong. The revenue grew by 24%. When we look at how strong of growth this actually is, there's very few companies in the world that can grow this strong for this long of a period of time, especially ones as big as Google. Google grew by 24% year-over-year, and it was their 12th consecutive quarter of double-digit growth. Operating income rose 30% in the quarter. So, just a a nice 30% rise in operating income. Google services grew by 15%. Google Cloud grew by 82%. So, Google is less dependent today on its search business than it's ever been before because they're growing this new business with cloud at an a ridiculous pace. Google's posting ridiculous operating cash flow and net income. It is the most profitable company in the world based on its net income. The thing that investors are concerned about and the reason the stock is wavering a little bit this week is because of their long-term capex investment cycle. Google continues to put more and more money into capex. For the first time in a while, their capex was negative. Here's what this looks like on a quarter-over-quarter basis. We see Google's capex every single quarter. If we zoom into the past 10 years, you can see that this quarter it goes down into the negatives. Now, there's many situations where capex going negative is a bad thing. If a company's no longer growing, it's swamped by debt. It has interest payments it can't make. Capex going into the negative, and those situations are bad. But if you have a company that has so many good investments, so many places to put money that are attractive that it's willing to take out debt, that's a good thing. And that's exactly what Google has done. Google is growing its cloud 82%. That warrants a bit of investment. There's many companies that have done likewise investments and have benefited dramatically. Look at Amazon growing into the behemoth it is today. It hasn't done that without heavy capex investments. Google's strategy for AI is working. They have flagship leading models. Google is not just a search business or a cloud business. It is an AI laboratory creating some of the best models in the world that are getting used at massive scale by virtually all the top companies. Their token usage is growing like crazy. People want their AI. They want Gemini. Gemini itself as an app has 950 million monthly users. But that doesn't even mention all the people using it in clouds with API to run their businesses to build upon Google along with the spend that they're doing in capex. Even the backlog continues to grow as fast as they can fulfill it. The cloud backlog increased by $50 billion sequentially. So another $50 billion just this quarter to $514 billion. Google's also a cyber security company. So you add on the Gemini with their AI models. Google's an AI lab. Now they're a cyber security company. They're a cloud hosting provider. They're an AI infrastructure company and they're a company that's making their own TPUs. So, they're a hardware seller that's similar to an AMD. This company is as full stack as it gets. Even working your way up the stack, Google, of course, has the distribution layer, which is another part of their full stack process. They have YouTube, they have Gmail, they have all the Google Drive. Uh, all of this is going really well as well. YouTube continues to dominate. Ad revenue grew 13% driven by both direct response and brand. They had 1.7 billion unique viewers watch the World Cup related content. Saw the clips being posted. YouTube of course is a juggernaut at this point. It refuses to be stopped and I don't see any end in sight in YouTube's growth. And when you look at all of this, it completes the full stack of one of the most incredible companies in the world that's growing above 20% per year. And then Google of course has all their little side bets and their things added on primarily Whimo which is also not just going into ride sharing. Now it's becoming a food delivery uh AV as well. Whimo is now delivering Walmart and Door Dash orders in different territories. The truth about these earnings is that they're really good. These are really good earnings. They shouldn't be anything for investors to complain about. Now, notwithstanding that, investors will continue to focus on the short term. Many will cite short-term price movement to justify any narrative that they attach to the company. But we're looking here as long-term investors. If I'm treating Google like buying a piece of real estate, I am buying a high-quality company that will generate earnings for long into the future. Fundamentally, things are fantastic. And if I can just exercise some patience and not checking the stock price every minute of every day, this could turn out to be a much better investment than it already has been. Now, Google's not the only company that investors have shared misleading news about or different opinions that are highly inaccurate. One of them is Netflix. Netflix is a company that, if you remember just a a couple weeks ago, there's an article published on Bloomberg by the author Lucas Shaw. And the title of this article is that Netflix viewers are abandoning shows after one season. Now, I remember this article because I covered it on my show in a segment. We spent time going over it and this new problem that Netflix is dealing with with keeping the attention of viewers from season 1 to season 2. Netflix was highlighted to have this growing issue. Now, I'm not going to go through the entire article again, but I'll just highlight a couple things. The segment is called Netflix's second season conundrum and he highlights that Netflix is struggling to get viewers to stick with its shows for more than one season. The author states that the sharp drop in viewers is a major concern for the company. He goes on to list some recent shows and the steep drop off from one season to the next. Now, when this was released just a week or so ago, it created a flurry of discussion online. Many people addressing this new problem from Netflix that many of the shows are not keeping people's attention. And this further solidified the entire narrative that Netflix has an engagement problem. The simply Netflix can't keep people engaged. After all, Instagram reals is really engaging. YouTube is really engaging, but Netflix can't keep people engaged. That was the theme of this article. Now, with that being said, what if I was to tell you just hypothetically that Netflix doesn't have an engagement problem? that all of this is fabricated and exaggerated by a media, by Bloomberg, that all of it created a flurry of discussion about something that is completely normal. Well, you might think that I'm crazy, but let me present some evidence. On Netflix's earnings call, the CEO was asked directly about their so-called engagement problem, as well as people dropping off after season 1. And here is what Ted Sarandos, the coco of the company, had to say. Our season 2 fall-off is actually slightly improved this year relative to last year. Now, of course, you can pick any five data points to tell any story you want, but I'm going to repeat this. Our season 2 falloff has actually slightly improved this year relative to last year. >> Ted Sandos says that season 2 fall-off has improved this year. It's actually gotten better and that anybody can spin up a couple data points, five data points to prove any story that they want. And when we look at this article, it's heavily reliant on five data points. We have one, two, three, four, five different shows showing a decline in viewership. One of them, by the way, which is Beef, which is an anthology, meaning it has a completely different cast in season 1 than season 2. Now, with this Bloomberg article, cherry-picking a few pieces of data to try to illustrate Netflix having a problem, of which the CEO actually says there's no problem and things have actually improved year-over-year. I pointed this out on X that I'd be more skeptical looking at articles from Bloomberg when reviewing them. And the author of the article replied to me stating that Netflix executives are attempting to ass concerns about engagement. That's all they're doing. They're just assaging concerns. So Lucas, when the CEO directly contradicts your story and says, "No, things are actually improving. Here's the data aggregate. We have less of a drop off season 2 than season 1." you just write that off as assaging investors. That's not assaging investors. That is directly contradicting your reporting and the entire point of your article. And then Lucas goes on to say, "How other people interpret my reporting is not my concern." So if you write an article that is highly misleading, that thousands, maybe millions of people online are confused about and draw wrong conclusions about, that apparently is not your concern. Lucas goes on to characterize the CEO's response here as quote a classic company response. So to get this straight, when a CEO corrects blatant misinformation with a cold hard fact, that is a classic response by a CEO according to the media here. Now, of course, when the media gets this wrong and blatantly misrepresents a situation going on with a company, there is no apology. There's no even admittance of any fault whatsoever. As far as they're concerned, their reporting was very sound. They didn't make any mistakes, even though it was directly factually rebutted by the company itself. Netflix went on to say that their total engagement increased by 2% year-over-year, that churn remains very healthy. They don't they don't see any increase in churn, that revenue has slowed down a little bit because they just got through price increases and the password crackdown, but those are the normal es and flows of business. And they they stated that the season 2 fall-off was better than expected. All of this going on while they're competing with the World Cup. That's not a sign of a company that has fires to put out or one that's heavily disadvantaged. It's a sign of a company that's in a very strong position. Netflix's business is overall growing and total engagement is increasing. But what we continue to deal with every single day is this flurry of misinformation, bad takes, misleading posts about these companies. And this problem is only growing. So take care in the type of sources you listen to. Now, moving on, we have two fail of the weeks. We have President Trump and we have trial attorneys. Let's go ahead and start off with President Trump. Now, before we even get into this one, I just have to highlight something real quick here. Some people don't think that I highlight conservatives or President Trump in the fail of the week or with any level of criticism, which is just not true. One of the things that I was the most critical about over the past two years with a series of episodes on it with lots of segments dedicated to it was the tariffs. I'm not a fan of the tariffs. I don't like the tariffs. I don't like the way that they were implemented. I didn't like that policy. That was a policy of President Trump's that I was highly critical of. So this idea that I'm only critical of the Elizabeth Warren, the Bernie Sanders, or the Mandanis is not accurate. And here we find ourselves once again with President Trump. This is something that I read that I I just hate the entire premise of this. I really do. I despise it. Truth Social is going to sell trading firms the fastest access to Trump's posts. Basically, Truth Social, which is owned in large part by Trump and his family, even if he doesn't directly manage it day-to-day, it's owned by him and he's profiting from it. This is a new move they're doing to monetize the releases of President Trump's posts. The feed is designed for organizations quote most impacted by the cost of delay and information such as algorithmic trading firms, the company said on a statement. until now. Firms that prioritize tracking influential truth posts have relied on manual monitoring. Truth API closes the gap. So basically, here's what's going on. A lot of people realize that President Trump tweets things. It moves the market. They move the market up and down. If he says that there's a peace agreement with uh Iran, that'll move the market up. If the peace agreements ripped to shreds, that'll move the market down. If he says that he's going to do this or that, he knows the market's going to go up or down. Now traders of course are always acting on those posts. They're always trading the market up and down right when they read his posts. But right now everybody's playing the game of refreshing. They're always looking at new posts, push notifications and refreshes. So everybody's kind of acting at the same time. What they're doing now is making an API, an API that will auto update the exact millisecond that the truth post is posted. So, it's posted in the public and it's posted on the API at the exact same time. But with API access, trading firms can act immediately with no delay. They can decipher the information within milliseconds using AI and immediately buy or sell based on that news. Therefore, they are paying to be able to act mechanically faster than the rest of the market. And this is a pay to- win strategy. So, basically, this is just not fair. It's pay to win. quote, "It certainly does not seem fair, but yes, a tech platform can tear its distribution of information without violating federal security law." So, technically, this isn't illegal. For some reason, the president can do this. Uh, but I hate it. I don't think the president should be selling tiered layers of access and speed to information to monetize presidential releases. That shouldn't be a focus. This is this is something that no president should be doing. This is also the type of thing that only allows the big guys to win. the advanced trading floors, the ones with the big algorithms. It gives them an advantage, not the little guy. And it does so while generating a huge amount of revenue for True Social and President Trump by selling very expensive API access to this immediate data feed. Overall, I don't like this at all. It's a huge fail. Now, on to the second one here. This is another fail that I I believe is even bigger. Uh this one is not just profit driven, but I I believe it's evil. Trial lawyers are lobbying against autonomous vehicles. Now, just the title of this doesn't really reflect how sinister and evil this news actually is. 37 to 40,000 Americans die in auto accidents every year. And we have large-scale real world evidence from Whimo and a joint analysis with Swiss Ree that driverless operations can be substantially safer than matched human driving with their current uh operating domains. The latest data shows that over 220 million miles have been driven by Whimo vehicles. And they have 94% fewer serious injuries, 82% fewer airbag deployments, and 93% fewer pedestrian injuries. The evidence is not fully independent, but it is usually transparent large-scale evidence. The evidence of this is just astoundingly overwhelming. AVs are not just safer. They're orders of magnitude safer. This is a fraction of the deaths and injuries that are happening in AVs than comparable human-driven vehicles. So, with thousands of lives in the balanced, who is against autonomous vehicles? Trial lawyers. Now, with AVs being such a good thing with them being so safe in reducing accidents and injuries and saving so many lives, then what could possibly be the motivation for trial lawyers to push against the progress of them to such a huge degree? Well, let's ignore the obvious elephant in the room and go with their stated reason so far. They have to think of very creative ways to oppose AVs. One of them they argue is their day in court. Meaning when you go on a Whimo, you you sign a clause saying that you'll have forced arbitration before you can sue Whimo. Meaning you have to try to settle things out of court before going to a big lawsuit. So that's one thing they wave as a big problem with AVs. Another thing they argue is that AV companies like Whimo are treating people like guinea pigs. They're human tests. And then there's a couple other things that they list that are even harder to understand. They are grasping at straws to come up with a justification to block AVs. But the real reason is pretty simple. Trial lawyers make a mass amount of money from car accidents. Around 97% of the car accidents that exist today are human errors. They're people making mistakes. It's not a car failure. It's not a machine failure. It's people falling asleep at the wheel or texting when they drive or driving drunk. All of these contribute massively to deaths in America and car accidents. They also contribute massively to lawsuits. lawsuits against insurance companies, lawsuits against other people. And the logic's pretty simple. If there's far fewer car accidents, there's far fewer lawsuits. If there's far fewer lawsuits, there are far fewer lawsuits for trial lawyers to litigate. This is the whole problem. AS pose a significant threat to the business model or the jobs of trial lawyers. So, I believe this is one of the most sinister lobbying groups today. They're directly slowing down and opposing a much safer, much more tested, much better technology for people that would literally save lives. And they're doing so because of financial motive. So, this is another massive fail of the week. That's all for this episode. Hope you enjoyed. See you in the next one.