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Now time for some of today's trending tickers. And we want to talk more about Alphabet and that possibility. Of course, we're looking at their earnings, but also there is this trial hanging over the company. Yesterday we spoke to DA Davidson analyst Gil Luria, and he talked about the potential breakup of Google and why he thinks maybe it should happen.

The Department of Justice is hell bent 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.

So, let's do a deeper dive now into Alphabet and Tesla. And guess what, we have an Alphabet bull sitting right next to me here in the form of Lou Basenese. I want to ask you specifically about what Gil was just saying there. This idea that maybe they should get ahead of it.

Wholeheartedly disagree. Why would you give up your assets willingly or spin them off? I mean, I think in this case, the sum of the parts is not better separated. It's part of the whole. I think you create more consumer confusion than encouraging competition if you divest Chrome. I mean, let's be fair. What other search engines are you going to use? I mean, it's so embedded and entrenched, it's synonymous with the word search. Is there really going to be an upstart that does it differently, right?

Well, there maybe there wouldn't be another search. Maybe the search paradigm just changes to generative AI, for example. In other words, maybe it's not another search quote-unquote company, maybe it's perplexity, or maybe it's.

Right. But I'd argue that will happen with the natural evolution of AI, right? This becomes the next S-curve of innovation where search is now at the waning end of it, and we're going to jump to generative AI, and it doesn't matter, right? So from that same way, from a shareholder's perspective.

From that standpoint, I guess you don't have to break it up because there's competitive pressures coming anyway.

Exactly. So I think from that standpoint, I think that's why the stock is so cheap. I mean, relatively speaking, it's about 17, 18 times forward earnings. A year ago, it was at like 26 or 27. It's this threat of being broken up, being forced to not pursue the dominant position that they've had and having that protected. I think this latest report showed exactly why you want to own it, right? AI is contributing to better advertising results, which will lead to even in uncertain economic times, marketers continuing to spend on marketing, which is.

You don't think ad spend is going to pull back.

I mean, ad spend ironically always pulls back in a recession, which makes no sense. Like, if you have a business and advertising drives your business, and you know you're going to a weak spot, why are you going to stop advertising, right?

If you don't have as much money.

I agree with that, but I think it has to be moderated. So I think you see an overreaction traditionally, like I used to traditionally think of meta as a great short in a recessionary environment because 98.9% of their revenue was all advertising, right? And people cut back. So yeah, I think there's some risk there, but I think what you're doing is you're counterbalancing that risk with AI improving results. So if I think that I'm not going to make as much, but then I can use AI-based search to make more, I can bridge that gap.

And you own alphabet.

I do. Full disclosure.

All right, let's talk about a stock that you do not own, I don't believe, and that's Tesla. Uh it surged as much as 10% today. The Department of Transportation rolled out a new framework for self-driving car regulation, including what it's saying is streamlining some reporting requirements for cars equipped with automated or driver assist systems. There was also some reporting out of India that Tesla had made a move sort of canceling people's deposits on Model 3s. That was seen as perhaps a precursor to selling cars there, maybe, but regardless, Tesla is a bigger story than just these two headlines that we're talking about today.

It is. For me, it's a decision of, do I invest based upon do I think this is a car company or a technology company? I come down on the side that this is nothing but a car company. Again, the revenue determines what type of company it is, right? 90% of it is related to automobiles. The other 10%, power storage and maybe it's the new technology that everyone, the bulls, want to lean into, right? So the other side is, hey, this is not a car company, the cars, the automobiles are the platform to deliver self-driving cars, artificial intelligence, and everything else that we want to think about. That falls apart though for me as an investor because there's other opportunities where I don't have to buy into the future promise and potential and pay up for it. Like Tesla's trading at valuations that in this market, I feel like I can get better bargains.

Even after the collapse in its stock.

Even after the collapse. Like this is what I was saying, I think I shared it with Madison. Like the MAG7 is a boy band that needs to desperately break up. It's not a singular trade anymore. It's not a thing. And I think this is a bifurcation here. Get rid of Tesla, you focus on the alphabets of the world. Apple situationally, when it pulls back too sharply, um I don't think it's a block that you can just own and hold uh if you haven't been doing that already, right? I'm not advocating just go get out of what you've held, but if I'm putting new money to work, I'm going to be biased towards value and real earnings and revenue, not future earnings and revenue.

So now my gears are turning like, okay, which boy band member is Tesla compared to?

Joey Fatone's in there somewhere.

I don't know my boy bands well enough to have like the one-to-one comparisons there.