Bitcoin has undoubtedly been one of the standout investment assets of the past decade. Despite its extreme price volatility, it has delivered life-changing returns for long-term holders. However, this does not necessarily mean it remains suitable for current investors. Compared to stocks, cryptocurrency lacks a core element: cash flow. These digital assets, while exciting, are inherently more akin to a speculative game, betting on whether subsequent investors will flood in and drive prices higher. Consequently, cryptocurrencies carry extremely high risks compared to most stocks, which are backed by tangible businesses and stable annual cash flows. In contrast, some publicly listed companies generate massive cash flows for shareholders annually, and their long-term potential may far exceed that of any cryptocurrency.
First is the tech giant Alphabet (GOOG). A leader in artificial intelligence innovation, the company boasts well-known businesses like Google, YouTube, Google Cloud, and Waymo. With a market capitalization of approximately $3 trillion, Alphabet is already one of the largest companies globally. While the impact of AI on the software and tech industry is seen as a challenge, Alphabet is perfectly positioned to capitalize on this AI boom. Services like Google Search, YouTube, and Google Maps have billions of users, and this vast amount of data serves as a valuable resource for training AI tools like Gemini. Simultaneously, its self-developed Tensor Processing Units, refined over a decade, enable it to handle more AI queries than competitors like OpenAI.
These core strengths are continuously translating into revenue growth. Last quarter, Alphabet’s subscription revenue climbed 20% year-over-year to $11.2 billion, which includes contributions from Gemini. The Google Search business remains robust, with revenue growing 12% year-over-year to $54 billion in the same period. Solid operations generate substantial free cash flow – reaching $67 billion over the past twelve months. The company is also making record capital investments to expand its data center network, with capital expenditures of $67 billion over the past twelve months, expected to increase to $75 billion in 2025. Compared to OpenAI, which has never achieved positive cash flow, Alphabet is clearly a more compelling AI investment for the long term.
Another company worth noting is Airbnb (ABNB). As an innovator in travel services, it might benefit from AI optimizing the travel search experience, but the current investment thesis for this stock is more straightforward. This platform focused on unique homestays is driving overall booking growth by expanding into new markets and attracting more hosts. Through localized operations and platform customization strategies, Airbnb has recently made positive progress in markets like Japan and Germany.
Although the total booking value on the platform reached $23.5 billion last quarter, its business is still primarily driven by a few countries like the United States, United Kingdom, and France. Expansion into emerging travel destinations like Japan and Mexico will inject new momentum for future growth. This growth is already evident: over the past twelve months, Airbnb’s total revenue was $11.6 billion, growing 13% year-over-year last quarter, with a cumulative increase of 243% over the past five years. Despite being a relatively young company, Airbnb, while investing for the future, also generates strong free cash flow – totaling $4.3 billion over the past twelve months. The company is using this cash for ongoing share repurchases, which, similar to Alphabet, will boost earnings per share over the long term.
From a fundamental financial health perspective, both Alphabet and Airbnb demonstrate investment value based on tangible businesses and stable cash flows. For investors seeking steady long-term returns, these two companies are undoubtedly wiser choices than betting on cryptocurrencies.
