Don't Trust AI With Your Money Until You See This Comparison

Duration: 7:25 1414 transcript words EN summary

Video summary

The rapid advancement of artificial intelligence has fundamentally transformed how investors conduct stock research, shifting the process from hours of manual report analysis to quick queries using general tools like ChatGPT and Claude. However, a significant concern remains regarding these general-purpose AIs: the source and accuracy of their financial data. Since incorrect numbers can derail an entire investment thesis, relying on unverified information is risky when dealing with hard-earned money. To address this, the video introduces LongBridge AI, a specialized tool powered by a MAS-regulated brokerage platform in Singapore that integrates directly with professional financial data providers like FactSet. This integration ensures that the data used for analysis is both accurate and reliable, allowing investors to streamline their research without needing to jump between multiple websites or databases. To demonstrate the power of this tool, the presenter analyzes Alphabet (Google) after noticing Berkshire Hathaway's recent purchase of shares despite a drop in Google's stock price below Buffett's entry point. Initial surface-level analysis using LongBridge AI revealed that Google appeared undervalued with a Price-to-Earnings ratio of only 16 times earnings, significantly lower than its five-year average of 23 times. However, digging deeper into the Q2 numbers showed a discrepancy where net income jumped to $112 billion while operating income was merely $41 billion. LongBridge AI quickly identified that this massive spike in earnings was not due to improved core business performance but rather unrealized gains on equity securities, such as investments in SpaceX and Entropic, which are now reported under new US accounting rules. When the AI adjusted the calculation by excluding these $99 billion in capital gains, the core PE ratio shifted to the mid-30s range, revealing that Google was not as cheap as it initially seemed. Beyond simply correcting valuation metrics, LongBridge AI provided a holistic view of why Warren Buffett might still find value in Alphabet despite the higher adjusted valuation. The AI highlighted four key factors: Google's high growth rate justifies a premium multiple, its wide economic moat built on essential services like Search and Cloud, its massive operating cash flow generation, and the potential hidden value in its private investments. Crucially, the tool did not just present a one-sided argument but also prompted the user to consider significant risks, such as Alphabet's heavy spending on AI infrastructure where future returns are uncertain. This balanced approach helped refine the investment thesis by combining positive fundamentals with necessary risk awareness, demonstrating how AI can act as an efficient research assistant rather than a decision-maker that tells users what to buy. In conclusion, while AI should not replace human judgment in making final investment decisions, tools like LongBridge AI can drastically improve efficiency and depth of analysis. The video emphasizes using such technology to understand the entire picture of a company rather than relying on it to select stocks blindly. For new users, there are also incentives available, including cash coupons, interest boosts, and free shares upon signing up for a free account. Ultimately, the presenter encourages viewers to try this specialized AI tool to analyze their own research targets, suggesting that they might discover insights they previously missed. By leveraging accurate data and comprehensive analysis, investors can make more informed decisions while saving valuable time in their daily research routine.

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With the rise of AI, the way that we research stocks have completely changed. These days, instead of spending hours digging through any reports, earning releases, many investors are already using AI tools like Claude and ChatGPT to speed up their research process. But, there's always one concern about using general tools like this. Where exactly is the financial data coming from? And how accurate the information is? Because when we are making decisions using our hard-earned money, one wrong number can completely change the whole investment thesis. But, lucky for you, I'm Chloe, your other investor teaching you everything about money and investing that school never taught you. That's why in this video, I want to share with you one very powerful AI tool that I recently started using to help me speed up my investment research process. And most importantly, the data provided is actually professional and accurate. And this AI is actually powered by LongBridge. In case you're wondering, LongBridge is actually a MAS regulated brokerage platform in Singapore, and the AI is directly integrated with the brokerage platform. The good thing about LongBridge is it already works with professional financial data provider like FactSet. So, instead of jumping between multiple websites, financial databases, and AI tools, I wanted to see can I actually use LongBridge AI to speed up my entire stock research process? And recently, I found a perfect stock to test on it, and that is Google. The reason why I decided to test on Alphabet is because recently Berkshire Hathaway, Buffett's company, actually bought into Alphabet. And Google's current share price has actually fallen below Buffett's purchase price. So, naturally, I became curious. Is Google really cheap right now? That's why I decided to start digging into numbers, and the recent earnings number looked really attractive. The reported earnings jumped significantly, and if you calculate the current PE ratio, Google appeared to be trading at only about 16 times earnings. For a company like Google, that immediately caught my attention. Especially when you compare with the historical PE ratio of 5-year average, which is about 23 times. Right now, Google really looked very undervalued. But, something doesn't feel quite right here. When I was looking deeper into Google's Q2 numbers, its net income had recently jumped significantly to around $112 billion. But, the operating income was only $41 billion. That's a huge difference. So, I started to wonder what exactly caused Google's earnings to explode. And traditionally, if you want to dig out the answer for this question, it would take a lot of hours digging into reports and finding out the exact insights what is causing that. But this time, I decided to ask LongBridge AI this question instead. And within seconds, LongBridge AI helped me to uncover something really crucial. It showed me that the massive earning spike wasn't because Google's core business became two to three times more profitable. A huge part of it came from gains on equity securities. In other words, a significant part of earnings came from Google's reevaluation of its investment portfolio rather than from its day-to-day operating business. And LongBridge AI even helped me to dig even deeper into investments such as SpaceX and Entropic, whose valuations have increased substantially over this period of time. Because under the new US accounting rules, change in value of certain investment equity can now flow through into the income statement. So, even if Google didn't necessarily sell away those investments, the unrealized gains can still be reported as net income. That's why no wonder when you look at the current PE valuation, Google seemed way too cheap. So then I asked LongBridge AI to help me calculate the actual PE ratio without taking in this $99 billion unrealized capital gains. And LongBridge AI helped me calculate the core PE ratio right now was actually close to mid-30s range. So, suddenly Google wasn't so cheap anymore. This one insight completely changed my investing thesis towards Google. And LongBridge AI helped me to uncover this within just minutes. Now, before I share with you why I personally think Buffett bought Google despite of this not so cheap valuation, since we are talking about LongBridge AI, there's actually a pretty good welcome offer for its new users. Once you register for your free LongBridge account, simply log in and send your first prompt to LongBridge AI. You can receive a $6 cash coupon plus 10% interest boost for the next 100 days, applicable on deposit of up to 3,000 Sing dollars. You can also qualify for $30 worth of SpaceX share, and depending on your deposit amount and trading activity, you will even unlock more free Nvidia shares. On top of that, you will enjoy lifetime $0 commission for Hong Kong, SG, and US stocks plus zero platform fees. And limited time $0 commission for US trading. So, if you're new to LongBridge, make sure to check out the link by my description box below and sign up to unlock all these free rewards. Now, let's get back to why do I think that Buffett actually bought Google recently? So, instead of spending another hours doing research, I actually continue to ask LongBridge AI this question. And here are the answers that LongBridge AI has given me. Number one, Google's growth does justify the premium. Although the current core P/E ratio is above 30 times earnings, LongBridge AI pointed out that we should shouldn't be just looking at the P/E ratio in isolation. We should also look at how quickly has Google business grow over the years, and if this 35 times earnings is still expensive relative to Google's growth. Number two, Google still have very incredible economic moat. Google has many core businesses that you and me use every single day from Google search, YouTube, Cloud, Android, Gemini, and a broader AI ecosystem. These are very powerful businesses that offer Google a very good competitive advantage. So, even if the valuation isn't exactly cheap, we are still buying a high-quality business. Number three, Google generates enormous amount of cash flow. During the recent quarter, Google generated about $39 billion in operating cash flow, and we all know cash flow is the bloodline of a business. And reason number four, there could be hidden value outside of Google's core business right now. Because apart from all those famous businesses that we already know, Google also owns stakes in private businesses and investments, and these underlying businesses actually have economic value. So, we shouldn't treat these $99 million unrealized gain as something completely worthless. So, I really like how Longbridge AI actually give me both sides of the coin, tell me to think about my investment decision more holistically. On top of that, it also highlighted key risk that I should be aware of as an investor. Alphabet is spending enormous amount of money on AI infrastructure, and until today, we still don't know how would these investments materialize in the future. I also like how Longbridge AI prompted me with even more questions and highlighted other areas that could be worth looking into. And because of this, right now my Google investment thesis became way more holistic, and Longbridge AI definitely helped me to complete the entire research process so much faster. Of course, AI shouldn't be making the investment decision for you, but it can make you a much more efficient researcher. So, instead of using this AI to tell me what stock to buy, I think a better way is to use Longbridge AI to help you to understand the whole entire picture better. So, would you give Longbridge AI a try? And what do you think about the current Google's valuation? Let me know in the comments. If you want to give Longbridge AI a try, make sure to sign up by my exclusive link in the description box and unlock all these additional bonuses shared over here. And try using it analyze one of the stocks that you are currently researching. You might be surprised what you are going to discover. If you enjoyed this video, remember to give it a thumbs up and share it to people that you find that they will also get benefit from this tool. Also, make sure to subscribe to my channel so that you will not miss out any additional future update. I will see you in the next video. Arigato. >> [music] [music]