Overview of TIP838: Google, Reddit, Amazon – Are Our Biggest Winners Still a Buy?
In this episode of The Investor’s Podcast, Shawn O’Malley and Daniel Mahncke revisit some of their biggest winning stock picks and ask two core questions: why did these companies work so well, and what can investors learn from them going forward? They also debate whether the names are still attractive at today’s prices, with a strong focus on how AI, capital spending, and valuation re-ratings have changed the investing landscape for Alphabet, Amazon, Reddit, and several past ideas that were not added to the portfolio.
Main Themes
1) Winners are often driven by both fundamentals and narrative shifts
The hosts emphasize that many of their big winners did not simply rise because of steady business growth. In several cases, the market completely changed its view of the company within a year:
- Google went from “search is doomed” and “DOJ breakup risk” to an AI and cloud beneficiary.
- Amazon moved from being seen as a mature retail/cloud giant to an AI and infrastructure compounder.
- Reddit benefited from rapid monetization even while user growth raised concerns.
- Other names like TSMC, Dell, and Comfort Systems were re-rated as AI infrastructure plays.
2) Valuation matters, but quality can justify holding through richness
A recurring message was that great businesses can remain great even when they no longer look cheap. The hosts contrast this with lower-quality or more concentrated businesses, where trimming or selling makes more sense if valuation becomes too stretched.
3) AI is changing not just growth rates, but business models
The discussion repeatedly returned to AI as a major force reshaping:
- search and advertising,
- cloud demand,
- data center spending,
- chip demand,
- and even the capital intensity of previously “asset-light” businesses.
Company-by-Company Takeaways
Alphabet (Google)
Alphabet was the episode’s most important case study and remains the hosts’ largest holding.
Why it worked
- The stock was bought when fears around search disruption, OpenAI, and antitrust risk were extremely negative.
- Since then, sentiment shifted as Gemini improved, AI Overviews launched, and Google Cloud accelerated.
- The market began to recognize that Alphabet would not simply stand still while AI evolved around it.
Key concerns today
- Alphabet is now spending massive amounts on data centers, chips, and AI infrastructure.
- Capex guidance is around $200B this year, with estimates even higher next year.
- Free cash flow has been pressured, and the stock was punished after earnings because investors worry about:
- capital intensity,
- depreciation drag,
- debt/equity financing,
- and whether returns on these investments will be strong enough.
Current view
- The hosts still like the business and are comfortable holding it.
- However, they would not add new capital at today’s price.
- Their stance: hold quality compounding businesses if you already own them, especially when long-term conviction is high.
Amazon
Amazon is viewed as one of the best current opportunities among their large holdings.
Why it’s attractive
- Amazon is also pouring roughly $200B into capex, largely to support AI and infrastructure.
- The company has:
- AWS,
- an internal chip business,
- a huge logistics network,
- advertising,
- marketplace data,
- and potential automation gains in fulfillment.
Why it may still have more room to run
- The hosts think Amazon is better priced than Google right now.
- It has a less demanding valuation relative to its growth and quality.
- If AI works, Amazon benefits.
- If AI disappoints, Amazon still owns a very strong business and can adjust spending.
Strategic thesis
Amazon’s long-term margin potential may be improved by:
- warehouse automation,
- custom chips,
- operating leverage,
- and a more efficient fulfillment network.
Reddit was described as one of the more volatile but still promising winners.
Why it worked
- The company has shown it can monetize better than many expected.
- Revenue growth has been strong even though user growth is less impressive.
- The hosts acknowledge they underestimated Reddit’s ability to reach profitability and margin expansion.
Key concerns
- Logged-in user growth in the U.S. was weaker than the market wanted.
- Reddit is becoming more dependent on:
- Google search traffic,
- AI search behavior,
- and whether users move from logged-out discovery to logged-in participation.
- The company also stopped reporting some user metrics, which the hosts view skeptically.
Current view
- Still bullish on the business long term.
- More cautious on the stock than they are on Alphabet or Amazon.
- They are comfortable holding, but less inclined to buy aggressively after the latest earnings report.
Remitly
Remitly is highlighted as an example of a successful non-portfolio winner.
Why it worked
- The company’s margins expanded much faster than expected.
- What had looked like a future margin target was achieved much earlier.
- The hosts point to this as a lesson in understanding earnings power, not just near-term reported numbers.
Why it was not added to the main portfolio
- Payment/remittance businesses are viewed as lower-conviction and more prone to disruption.
- The team prefers businesses they can monitor and hold for much longer periods.
- This was more of a personal-account conviction play than a core portfolio fit.
TSMC
TSMC is presented as one of the biggest “missed” winners.
Why it worked
- It remains central to the semiconductor and AI supply chain.
- Virtually every major chip designer relies on it.
- AI demand has reinforced its importance.
Why they didn’t buy
- Geopolitical risk around Taiwan and China was a major concern.
- The semiconductor industry’s fast-changing competitive dynamics also made long-term underwriting difficult.
Lesson learned
The hosts felt they may have treated the situation too binary:
- either invest meaningfully,
- or don’t invest at all.
They now suggest a smaller sizing could have been a smarter way to express conviction while limiting downside.
Dell
Dell was another AI infrastructure winner they passed on.
Why it worked
- AI server demand and data center contracts surged.
- Even though margins are low, the scale of the business and operating leverage helped earnings grow.
- The market rewarded the stock with a much higher multiple.
Why they passed
- The business still looks structurally lower-margin.
- The hosts believed the AI server boom might not be sustainable forever.
- They expect the multiple to compress if the AI buildout slows.
Comfort Systems
Comfort Systems was a major surprise winner.
Why it worked
- It is exposed to AI data center and semiconductor factory construction.
- That positioned it well for the current capex cycle.
- The stock rose far more than they expected.
Lesson
This was another reminder that:
- companies with cyclical exposure can look boring or expensive at first,
- but if they sit in the right part of a megatrend, multiple expansion can be huge.
Core Lessons for Investors
1) Great businesses surprise to the upside
This is one of the hosts’ main takeaways from the episode:
- great businesses usually outperform expectations,
- mediocre businesses usually disappoint.
2) Valuation models are only as good as the assumptions
The hosts stress that financial models are useful, but they often:
- anchor to the status quo,
- miss macro shifts,
- and fail to capture major changes in narrative or growth.
3) Know when to hold and when to trim
They draw a distinction between:
- Alphabet, where they’re happy to hold through a rich valuation because of the business quality and diversification,
- and Reddit, where valuation and business volatility make trimming more reasonable.
4) AI winners are not just model winners
The real beneficiaries of AI may be:
- infrastructure providers,
- chip makers,
- cloud platforms,
- and companies with massive distribution advantages.
5) Letting winners run is powerful
The episode closes with a reminder from Peter Lynch: a few big winners can outweigh many mistakes.
Notable Quote
“All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.”
Bottom Line
The episode is both a retrospective and a framework piece. The hosts conclude that their biggest winners were driven by a mix of:
- strong business quality,
- underappreciated optionality,
- AI tailwinds,
- and market narrative reversals.
Their current stance is broadly:
- Alphabet: hold, but not a new buy at current prices
- Amazon: still attractive; preferred over Google at today’s levels
- Reddit: promising, but more volatile and harder to underwrite
- TSMC / Dell / Comfort Systems: examples of AI-driven upside that they underweighted or missed
- Remitly: a reminder that operational inflection can happen much faster than expected
Overall, the episode reinforces one of the hosts’ core investing beliefs: identify exceptional businesses early, size them wisely, and don’t be too quick to sell when the market proves you right.