Weitz Large Cap Equity Fund on Alphabet Inc.
Thesis
Alphabet is one of the fund's large positions among hyperscale cloud and AI service providers. Its shares remained in favor during the second quarter as investors differentiated between AI infrastructure suppliers and buyers of AI chips. The fund continues to believe Alphabet is competitively well positioned and can earn reasonable returns on its substantial AI-related capital spending.
“We continue to believe that all five companies are competitively well positioned and poised to earn reasonable returns on their voracious capital spending.”
Key risks
- Investors are increasingly scrutinizing whether heavy AI capital spending will generate acceptable returns.