Google’s “Kodak Moment”

Alphabet Inc. — the parent company of Google, YouTube and more — is one of the largest tech companies in the world… worth a staggering $1.4 trillion.

But its biggest revenue generator is on the verge of becoming obsolete.

What’s worse, Alphabet may have sealed its own fate… much like the mistake that transformed Kodak from a $31 billion household name into a nearly worthless zombie.

I’ll tell you the full story in a minute — including why it may be a good time to bet against Alphabet.

First, though, let’s take our usual tour through our best articles…

Your Top Articles of the Week:

• “Are We REALLY Doing This again?” (Rich Retirement Letter, Zach Scheidt): Our analysts are still divided on which way stocks will go next. This article from Zach lets you know exactly which camp he’s in. He believes the run-up in speculative stocks is just a replay of a horror movie that investors should recognize by now. Learn his reasons for why you should sit out the current tech rally.

• “X.com: Elon Musk’s Secret Master Plan” (Altucher Confidential, Chris Campbell): Anyone who’s still wondering why Elon Musk bought Twitter probably hasn’t heard of x.com. It’s all part of a master plan that Musk has been fomenting for over 22 years. Chris walks you through the timeline to the end-goal — an “everything app” that will ultimately lead to widespread cryptocurrency transactions. Get the full story before it becomes front-page news.

• “Where Are Oil Prices Headed From Here?” (The Situation Report With Jim Rickards, Jim Rickards): How much we pay for energy has a huge impact on the economy. So Jim recently took his Situation Report readers on a deep dive into the oil and gas markets. He shares detailed information on the forces pushing oil prices higher and lower — and reveals which direction will win out in the end. His analysis could be crucial for planning everything from your next investments to your household budget… so I’ve unlocked Jim’s article for you.

Remember, we publish tens to HUNDREDS of articles. The write-ups above are our TOP ones for the week — including one that had been roped off from the public. If you want to stay ahead of the pack, make sure you’re caught up now.

And if you’d like to nominate any of our articles for next week’s “Top 3,” just let me know at concierge@paradigmpressgroup.com.

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We’ll kick things off with Richard F.’s kind words for Sean Ring:

This was the first missive I've read from you. I love the way you put things into perspective. Keep ‘em coming.

I’m glad you enjoyed Sean Ring’s Morning Reckoning, Richard! And while Sean’s Morning Reckoning missives only come out once a week, you can hear from him daily in Rude Awakening.

Sign up for a free subscription on the homepage, here. Sean will be happy to have you aboard!

We also heard from Jerry G., who expressed his satisfaction with Jim Rickards and his team:

I’ve been impressed with your stock selections. I have been monitoring your recommendations, and wins vs. your losses are a positive invitation for me to get into the water. I have been burned badly from stock selection advice in the past, so I have been cautious about investing on what others recommend. But Rickards’ organization appears to be a savvy team that one can trust. Keep up the good work.

Jerry, thank you for taking the time to share your thoughts. I’m glad to hear that you’ve been impressed with Jim’s stock selections. I understand your caution and appreciate your trust in Jim and his team. We take pride in our ability to provide reliable and trustworthy research.

You can bet I’ll be sharing this with Jim!

Finally from the mailbag…

While we’re encouraged by the compliments we receive, we grow and improve through your critique. So we’ll always listen when someone says we’ve fallen short of the mark.

For example, Norman N. is unhappy with one of the ways we’ve chosen to communicate with you. He says:

I understand that Zoom is free… but I will not connect to any entity using or previously using servers in China. If all future presentations will be utilizing Zoom, then I guess I must probably end my subscription.

I appreciate the honesty, Norman. And I understand your concerns about data being routed through China. So let me see if I can help put your fears to rest.

First, we use Zoom because it offers a robust and easy-to-use platform that helps us get our messages out to as many people as possible. But not all of our presentations are through Zoom… and we’re always looking for alternatives.

When we do use Zoom, it’s through a professional account — which lets us choose to avoid servers in specific regions and countries, including China. You also don’t need a Zoom account to watch our presentations, further limiting any risks to you.

The point is, we take your privacy very seriously and use every available precaution to keep your information safe. So you shouldn’t have to worry about any government stealing your personal data from us.

Hopefully that eases some of your concerns.

Now, here’s what’s happening around the water cooler this week…

The Water Cooler — Upcoming Events and More

Alphabet Inc.’s famous brands like Google and YouTube make it one of the largest tech businesses on Earth.

So it was big news last week when its earnings report came in worse than expected.

Most analysts and investors focused on the company’s disappointing ad revenue from YouTube. It’s a sign that the popular streaming video site is losing market share to rivals like TikTok.

But our team says that Alphabet shareholders should be more worried about the future of Google’s search engine revenue.

There’s no question that Google is the #1 way people find information on the internet. Its name is even a verb. Need an answer? Google it!

The search engine is also Alphabet’s cash cow — responsible for $162 billion of the $282 billion in revenue the entire company raked in last year.

And it’s constantly evolving, too. These days, you can ask a question directly on Google’s webpage and get a response displayed right on your screen… no extra clicking required.

But in most cases, Google’s algorithm is just pulling text from another website that contains words related to your question.

For example, if you ask Google to explain the pros and cons of electric cars, the first return is a paragraph pulled from Car & Driver Magazine.

So Google isn’t really answering your question… it’s just scanning for another site that can.

But artificial intelligence (AI) could completely change the way you find the information you need. The software can pull data from a wide range of sources, then synthesize it into an answer that’s nearly indistinguishable from what a human would write.

If you’ve been following our AI coverage, you know programs like ChatGPT can already provide detailed answers to sophisticated questions.

For example, ask it to list pros and cons of electric cars, and it spits out an entire list of answers — none of which requires clicking to a completely different website.

Alphabet has been working on similar AI advancements for years, seemingly without any visible progress. And now that ChatGPT is earning so much attention and accolades, Google’s technology seems to be falling behind.

Ray Blanco, our in-house tech expert, wonders if Google forgot an important lesson from Eastman Kodak.

Kodak used to be one of the most valuable brands in the world — synonymous with cameras, film and other photography products.

But it also could have been a pioneer in digital imaging. In fact, a Kodak engineer developed the world’s first digital camera in 1975. But management shelved the idea because they didn’t want it cutting into Kodak’s film revenue.

So instead, Kodak spent 15 years on the sidelines while other companies introduced digital cameras. When Kodak finally jumped into the filmless future in 1991, it was too late.

Over the next 20 years, Kodak saw its revenues plummet before finally declaring bankruptcy in 2012. The company still exists, but only as a shadow of its former self.

Alphabet may face a similar fate — especially if it slow-walked AI development out of fear that it would disrupt Google’s search engine revenue.

Now it’s facing competitors who seem to be ahead in the AI game — and are on the verge of capturing the business that Alphabet relies on.

It’s too soon to tell if Google can rise to the challenge… but our analysts are watching closely. They’re also sharing ways to bet on the companies powering the AI revolution.

So don’t be surprised if Google is at the start of a downward trend. You may even want to consider buying speculative put options on Alphabet — in case it is on the road to becoming obsolete.