Battle of the Billionaires: Bill Ackman Has 14% of Pershing Square's Portfolio Invested in This Dirt Cheap "Magnificent Seven" Stock, Which Coatue Management's Philippe Laffont Thinks Is Headed for Further Pressure

Bill Ackman and Philippe Laffont have opposing views on Alphabet stock

Billionaire hedge fund manager Bill Ackman's apach to portfolio management is rather simple

The founder and CEO of Pershing Square Capital Management keeps its portfolio concentrated in a small number of large-cap stocks that he buys when they are arguably trading below their intrinsic values

Coatue Management founder Philippe Laffont has a different philosophy

Coatue's portfolio boasts a number of high-growth stocks that appear poised to dominate emerging trends

One company that Ackman and Laffont seem to have different views on is "Magnificent Seven" member Alphabet (GOOGL 0. 49%) (GOOG 0

Let's start by exploring what drives Ackman's conviction in the megacap artificial intelligence (AI) stock

From there, I'll detail a major risk factor that Laffont recently called out for the stock

Lastly, I'll vide my own breakdown of Alphabet and whether or not the stock could be worth a look right now

Why does Bill Ackman Alphabet

In its annual investor presentation, the firm identified Alphabet as an "underappreciated" opportunity in the AI landscape

It went on to highlight new opportunities in digital advertising and cloud computing as catalysts for Alphabet that could drive accelerated revenue growth and fit margin expansion

For example, Google's responses now highlight AI-crafted summaries

So far, this feature has shown some encouraging metrics such as higher user engagement trends among those who use the summaries

This puts Google in an advantageous position when it comes to enticing advertisers to its platform

In addition, Alphabet's cloud computing has made meaningful investments in cybersecurity tools over the last few years

The integration of AI-powered cybersecurity services into the Google Cloud Platform (GCP) is a major differentiator from peers such as Microsoft Azure and Amazon Web Services (AWS)

Moreover, it also opens the door to another enormous addressable market and vides Alphabet with more direct ways to compete with the s of CrowdStrike and other leading cybersecurity players

GOOGL Net Income (TTM) data by YCharts

Over the past year, Alphabet generated more net income than its closest cloud infrastructure peers

Yet it's trading at a forward-price-to-earnings (P/E) multiple of just 18. 4 -- roughly half the ratios of Amazon and Microsoft

Given Alphabet's discounted valuation and the potential value to be gained from integrating AI and cybersecurity across its vast ecosystem, I can see why the company earned a position in Pershing Square's portfolio

Laffont just called out a major risk factor for Alphabet investors During a recent panel discussion on CNBC's Squawk Box, Laffont detailed his thoughts on Alphabet

However, Laffont expressed concern over the outlook for Google

He believes that the rise of OpenAI could pose a threat to Google's

Image Source: Getty Images

Is Alphabet stock a buy right now

I completely understand Laffont's stance, and I would go as far as to say that his opinion is rooted in reality

Some trends have already been indicating that Google is losing some of its momentum, ly due to the rise of OpenAI and competing large language models (LLMs)

With that said, I'd to call out an interesting development between Alphabet and OpenAI

The two companies recently formed a strategic partnership under which OpenAI will leverage Google Cloud's network

As Ackman's thesis shows, Alphabet has some creative ways to grow its budding cloud infrastructure relative to the competition

Considering OpenAI's closest ally throughout the AI revolution has been Microsoft, I see the expansion of its relationship with Google Cloud as an incredibly savvy deal and potentially lucrative opportunity for Alphabet

Furthermore, if OpenAI does begin to meaningfully take from Google, then Alphabet appears to have identified a new way to offset that headwind while monetizing the very company that potentially threatens it

Although I understand Laffont's view, I think the bearish sentiment surrounding Alphabet is more academic than reality

Moreover, I think the potential downside is baked into Alphabet's stock at this point, considering the steep discount and wide disparity in valuation multiples it trades at relative to its near peers (despite being the most fitable of the three)

I see Alphabet stock as a dirt-cheap, no-brainer opportunity right now

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors

Adam Spatacco has positions in Alphabet, Amazon, and Microsoft

The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, and Microsoft

The Motley Fool has a disclosure policy.