Google is a growth stock that is trading like a value stock, says MAI Capital's Chris Grisanti

My next guest is a value investor, but says Intel has too many issues for him to love as a value stock. And instead, he's turning to another tech name, which is Google, calling it a growth stock with a forward P.E. of just 20. He says it's trading like a value stock right now. Here to make his case is Chris Crisanti, the chief market strategist at NAI. Chris, it's great to see you. I mean, I appreciate any off-the-cuff thoughts about this Intel situation. Yeah, Kelly, I mean, this is superficially a natural for a value investor. We've done a lot of work on it. We just think the transition from the CPU, which is Intel's bread and butter, to the GPU, the graphic processor, which is NVIDIA's bread and butter, is profound. It's almost like going from the internal combustion engine to the electric car. And I don't think it's realistic to expect the companies that led the internal combustion revolution to lead the next revolution. And that's what's happening with Intel. And we didn't see in our research a way for them to claim back the ascendancy that they had lost. And I think that's becoming further and further in the rearview mirror. And I think the analyst, Mr. Stein, had a good idea of breaking the company into the foundry part and the chip design part. And I think that's probably the way they'll have to go, but they'll no longer be the preeminent U.S. semiconductor company. I asked him what the quickest way would be to get the shares to 50. Based on this chart, it would be to turn back the clock to January 1st, because they are- Right, or reverse split, right. Right, right. Good answer. Let's move along to Google then, which is catching your attention these days. Why? Sure. Well, this is like the Rodney Dangerfield of stocks. It gets no respect. They're hitting their earnings numbers. I think I was actually on with you the day they reported. It was a terrific number. The stock was up 8% that day. Since then, the antitrust news has come out, where the government has asked to break up the company. Now, I'd ask investors to take a deep breath. I am old enough to remember that Microsoft, in the late 90s, having their six-year battle with the antitrust authorities, where they asked the government to break up Microsoft. They lost the first round, and then Microsoft eventually prevailed on appeal. During that time, that stock tripled. Now, I think there's lots of reasons why you might like Google, you might not, but I would urge investors to look through the antitrust stuff that's going to take, I would say, at least a half a decade, and use this as an opportunity to do the numbers. It's now selling at its lowest P.E. relative to the market of all time. It's about 80% of the market P.E. In an expensive market, this is the one mag seven stock that I really like that can do well if it hits its earnings numbers. It's not terribly expensive, and it's a nice way to play in that space, even if you're scared of the other valuations. Rather than kind of digging in on Google, let me use that as a way to ask you about the broader market, because it's kind of ironic, and Google kind of highlights this situation. We have, by some metrics, the most expensive market we've ever had, with maybe just one or two exceptions at dates that you don't want to have comparisons with. And a lot of people are concerned we're overdue for some kind of correction here. And yet, you point to a stock like Google, one of the mag seven, who's trading it cheaper than the market. So what's going on here? Well, I think that there's a bifurcation here. Another group that we really like, even in this expensive market, is healthcare. They're now the worst performing group in the S&P. They typically do poorly in an election year when they get beat up by both parties. And then they typically come back the following year. In addition, this nomination of RFK Jr. has really put a damper on the stocks. We don't think he's anti-vaccine so much as he is pro-freedom in the sense of he'll push against mandates. But I don't think he'll discourage vaccine research and the profits from selling vaccines. So we'll see about that. But these stocks have really sold off. And so you get a tale of two markets. You have the value market. Pfizer, for example, is at eight times earnings with a 7% yield, an investment-grade company. And then you have the NVIDIAs, which are at 50 times, great company. But we can really argue about whether that's too high a price to pay. All I know is these are value investor stocks. No one wants to hear about healthcare right now. And you're right. Pfizer is like when you recommended Bryson 18 months ago over Tesla. That trade for that year did work out great. So leave us with a party. And I'm not even going to bring up Hershey because I'm kind. But leave us with a parting thought then for kind of equity performance in 2025, just the near term. Well, it's somewhat problematic. I mean, I don't see any immediate clouds in the sky. But looking at the valuation, which is, you know, 28 times trailing earnings, even though earnings went up 8% this year, the PE went from 23 to 28 because the market went up. That bill is going to come due. We're not going to stay at 28 times earnings for years and years. We're going to go back towards the average of 16 or 17 times. And when that happens, the ones that are going to get hit the most are the ones that have the furthest fall. So that's why I'm gravitating. I'm sailing closer to shore. I'm liking health care. I'm liking Google. So you can play in technology, but at a below market multiple. So I think it's I think it's time not to try to outperform. I think it's time to try to to to look towards more reasonable valuation. I know it sounds prudent, but I remember, you know, some of my favorite strategists a couple of years ago saying, you know, it's time to go into health care stocks and you would have gotten cream. So I feel like it's just one of those things where how do you know this is going? Like I said, I've given up on market timing. Absolutely. So, you know, I'm not young enough to know everything is the old saying. So so when you when you see enough times, the valuation is a bad indicator, but it's not a good timing indicator. But but you want to play the statistical averages. And if I can find cash flow again, the Pfizer, the worst case is it's going to be dead money and I'll collect my seven percent dividend each year. So that's not a bad, worst case scenario. All right, Chris.