Market Musings:

Google’s Kodak moment has arrived. 

It now faces the gut-wrenching task of shifting away from its highly profitable core (Search and Ads – 57% of its profits!) toward AI – a technology with a still-uncertain monetization model.

I’ve been hammering this theme in my shows and emails: Google must go all-in on AI, even though it has no real moat there… yet. It’s reminiscent of how mutual fund giants were forced into the low-fee ETF business. But for Google, this pivot is far more painful.

To be clear: Google isn’t going away. It has massive resources, and Cloud, Waymo, and YouTube are all solid pillars. YouTube in particular is more valuable than Netflix in my view.

But make no mistake – this will be an expensive, bruising fight, and AI capex is about to surge. The panic is real. It’s an AI arms race with no clear monetization roadmap. Moats are turning to puddles – slowly at first… and then all at once.

Short-term? I believe Google’s search dominance will erode faster than most expect.

My Bullish Pick: RDDT

This one’s a bit nuanced – but I’m bullish.

Why? Because AI needs real data from real people to stay relevant. Otherwise, it just regurgitates the same old material in a closed loop.

Reddit has exactly that – deep, loyal communities producing fresh, original conversations. Its global footprint is expanding, and cash flow has held up well.

Here’s the kicker: Google is already paying Reddit tens of millions for access to its content. And I think that’s just the beginning.

There’s a brewing legal and moral debate around whether AI should be able to scrape and use content without paying for it. If Reddit lands on the winning side of that debate – and I think it will – the monetization upside could be huge.

The stock has been cut in half. I think it’s a real contender for the next wave of AI-driven value.

UpWork (Ticker: UPWK)  

AI is coming for task-based freelancing.

UpWork connects businesses with freelancers who do things like copywriting, customer service, presentation design, video editing, art/thumbnails, and more.

But here’s the problem: AI is already doing many of those tasks. And it’s getting better every month.

Yes, more people might turn to freelance work as jobs are disrupted. But the work itself is changing – or disappearing. Deflation is coming to these types of gigs, and that means less revenue flowing through Upwork.

Short interest is already significant at 15%… and I think it’s headed higher.

Don’t forget my Turbo Income State of the Market show tomorrow morning at 10am ET.   Let’s dissect it all and find some income!

May the income be with you, 

Hans