Offshore

Dimitry Nakhla | Babylon Capital®
There have been two very different — and 𝘴𝘦𝘦𝘮𝘪𝘯𝘨𝘭𝘺 𝘰𝘱𝘱𝘰𝘴𝘪𝘯𝘨 — camps in Google over the last couple of years.

𝐎𝐧𝐞 𝐠𝐫𝐨𝐮𝐩 of world-class investors stepped in when shares traded ~15x earnings, amid regulatory pressure, competitive fears, and a narrative that Google would be an AI laggard.

𝐀𝐧𝐨𝐭𝐡𝐞𝐫 𝐠𝐫𝐨𝐮𝐩 began buying after Google’s AI breakout — once the company was clearly demonstrating leadership in models, infrastructure, and real-world deployment.

𝙄𝙣𝙩𝙚𝙧𝙚𝙨𝙩𝙞𝙣𝙜𝙡𝙮, 𝙢𝙖𝙣𝙮 𝙛𝙧𝙤𝙢 𝙩𝙝𝙚 𝙛𝙞𝙧𝙨𝙩 𝙘𝙖𝙢𝙥 𝙝𝙖𝙫𝙚 𝙩𝙧𝙞𝙢𝙢𝙚𝙙 𝙤𝙧 𝙨𝙤𝙢𝙚 𝙚𝙭𝙞𝙩𝙚𝙙, 𝙖𝙨 𝙢𝙖𝙣𝙮 𝙛𝙧𝙤𝙢 𝙩𝙝𝙚 𝙨𝙚𝙘𝙤𝙣𝙙 𝙘𝙖𝙢𝙥 𝙝𝙖𝙫𝙚 𝙚𝙣𝙩𝙚𝙧𝙚𝙙.

And I think 𝘣𝘰𝘵𝘩 𝘤𝘢𝘯 𝘣𝘦 𝘳𝘪𝘨𝘩𝘵.

𝐓𝐡𝐞 𝐟𝐢𝐫𝐬𝐭 𝐠𝐫𝐨𝐮𝐩 𝘸𝘢𝘴 𝘳𝘪𝘨𝘩𝘵 𝘣𝘦𝘤𝘢𝘶𝘴𝘦 𝘵𝘩𝘦 𝘳𝘪𝘴𝘬/𝘳𝘦𝘸𝘢𝘳𝘥 𝘸𝘢𝘴 𝘦𝘹𝘵𝘳𝘢𝘰𝘳𝘥𝘪𝘯𝘢𝘳𝘪𝘭𝘺 𝘢𝘴𝘺𝘮𝘮𝘦𝘵𝘳𝘪𝘤.

Bad news was abundant. Expectations were depressed. The margin of safety was wide.

𝐓𝐡𝐞 𝐬𝐞𝐜𝐨𝐧𝐝 𝐠𝐫𝐨𝐮𝐩 𝘮𝘢𝘺 𝘣𝘦 𝘳𝘪𝘨𝘩𝘵 𝘣𝘦𝘤𝘢𝘶𝘴𝘦 𝘵𝘩𝘦 𝘧𝘶𝘵𝘶𝘳𝘦 𝘪𝘴 𝘯𝘰𝘸 𝘤𝘭𝘦𝘢𝘳𝘦𝘳.

Google is proving itself as a serious AI leader, regulatory fears have softened, and the company’s long-term growth runway looks larger than it did two years ago.

Same company.

Different entry points.

Different sources of edge.

𝘌𝘢𝘳𝘭𝘪𝘦𝘳, Google was a multiple + sentiment mean-reversion opportunity.

𝘛𝘰𝘥𝘢𝘺, it’s more of a premium business compounding opportunity — where returns depend on sustained execution, not multiple expansion.

𝙄𝙣 𝙗𝙤𝙩𝙝 𝙘𝙖𝙨𝙚𝙨, 𝙩𝙝𝙚 𝙪𝙣𝙙𝙚𝙧𝙡𝙮𝙞𝙣𝙜 𝙗𝙚𝙡𝙞𝙚𝙛 𝙞𝙨 𝙨𝙞𝙢𝙞𝙡𝙖𝙧:

𝐆𝐨𝐨𝐠𝐥𝐞’𝐬 𝐥𝐨𝐧𝐠-𝐭𝐞𝐫𝐦 𝐨𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐲 𝐢𝐬 𝐛𝐢𝐠𝐠𝐞𝐫 𝐭𝐡𝐚𝐧 𝐰𝐡𝐚𝐭 𝐭𝐡𝐞 𝐦𝐚𝐫𝐤𝐞𝐭 𝐡𝐚𝐝 𝐛𝐞𝐞𝐧 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠.

I personally think Google is still early in its AI story. The applications, monetization paths, and ecosystem effects are just beginning to show themselves.

Not every great investment looks the same.

𝘚𝘰𝘮𝘦𝘵𝘪𝘮𝘦𝘴 the edge is buying when expectations collapse.

𝘚𝘰𝘮𝘦𝘵𝘪𝘮𝘦𝘴 the edge is recognizing that the future is larger than consensus.

Different paths.

Different expressions of the same long-term thesis.

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